The Senate voted 51-50 on Tuesday, October 24 to repeal a rule put in place
by the Consumer Financial Protection Bureau (CFPB) that banned mandatory
arbitration clauses in certain financial contracts.
All 48 Democrats, along with Republicans Lindsey Graham and John Kennedy,
voted against the resolution. Vice President Mike Pence cast the tie-breaking
vote late Tuesday night, allowing big banks to enjoy absolute immunity
from customer lawsuits of any kind. This is a huge win for Wall Street
lobbyists. There is now no incentive to prevent abuses such as the Equifax
data scandal or Wells Fargo's opening up millions of fraudulent accounts
without customers' permission.
In order to overturn this rule released in July of this year, Senate Republicans
used the Congressional Review Act, a seldom-used legislative process that
allows lawmakers to overturn recently finalized rules with a simple majority
vote, rather than the typical 60 votes.
"Tonight's vote is a giant setback for every consumer in this
country," Richard Cordray, the head of the Consumer Financial Protection
Bureau said in a statement. "Wall Street won and ordinary people
lost. Companies like Wells Fargo and Equifax remain free to break the
law without fear of legal blowback from their customers."
The House of Representatives already voted to overturn this rule back in
July, so now it will make its way to the president’s desk for his
"This bill is a giant wet kiss to Wall Street," said Senator
Elizabeth Warren on the Senate floor Tuesday night as she defended maintaining
the rule. "Bank lobbyists are crawling all over this place, begging
Congress to vote and make it easier for them to cheat consumers."
Not only does this vote remove this consumer protection, it prevents the
CFPB from introducing a “substantially similar” rule in the
future without congressional action.
“If there's no forced arbitration clause in your contract, you
have a choice. You can go to court or if your bank offers it you can pursue
arbitration... Chances are pretty good that if the bank charged you an
unauthorized $30 fee that there are other customers in the same boat and
that means if you want you can join a class action lawsuit against the
bank for free," said Warren. "A class action gives you a chance
to get some money back."
Our securities fraud and class action attorneys at Meyer Wilson have dedicated
their careers to protecting people targeted by fraudsters and taken advantage
of by banks, financial advisers and brokerage firms. As bills that affect
consumers are introduced and signed into law, we work hard to create new
plans of action that will continue to help our clients secure the maximum
recovery possible, and this new repeal won’t change our commitment
to that. If you were the victim of a scam or fraudulent scheme by a broker
for financial institution, call us at one of our office locations today or
send us your information to request a free case evaluation.