President Trump Repeals CFPB Arbitration Rule
Fri 03 Nov, 2017 / by McIntyre & Lemon / Client Alerts
11/03/17 -The Hill reports that President Donald Trump signed a congressional resolution nullifying the Consumer Financial Protection Bureau’s (CFPB) rule on arbitration.
His signature comes a day after announcing his support for the resolution.
Under the Congressional Review Act, Congress has 60 legislative days after a rule is issued to pass a resolution that disapproves of the rule. If both chambers pass the resolution and the Presidents sign it, the rule is nullified.
The House passed a resolution in July, which the Senate also passed two weeks ago. On October 30th, the CFPB Director, Richard Cordray, wrote the President directly appealing for a veto of the resolution.
The arbitration rule would have banned companies from preventing consumers from filing or participating in class action lawsuits and was set to take effect in 2018. The rule was intended to make it easier for consumers to bring class-action lawsuits against credit card companies, banks, and other financial institutions.
Time Line of Arbitration Rule:
July 19, 2017 – Final rule on arbitration agreements (Final Rule), was published in the Federal Register
July 25, 2017 – House Passes Repeal
July 31, 2017 – OCC Does Not Challenge CFPB Rule
August 22, 2017 – The U.S. Treasury Department released a review of the CFPB’s arbitration rule, finding that the rule would harm consumers and that the CFPB failed to meet legal requirements in issuing the rule.
October 30, 2017 – CFPB Director Richard Cordray writes directly to President Trump asking for a veto of the congressional resolution.
October 31, 2017 – President Trump announces his intention to sign the congressional resolution.
November 1, 2017 – President Trump signs congressional resolution.
The Hill; see also Treasury Report on Arbitration Rule; CFPB Director Letter to President; White House Press Release.