V.P. Pence Casts Deciding Senate Vote to Overrule CFPB Rule Against Arbitral Class Waivers

The Vice President cast the 51st Senate vote Tuesday to repeal the Consumer Financial Protection Bureau’s rule banning class-waivers in consumer financial services contracts' arbitration clauses.
The senate thus joined the house in using the Congressional Review Act which allows Congress to overturn an agency's recently finalized rule by a majority vote.

American Banker writes "Financial companies and the powerful U.S. Chamber of Commerce both opposed the rule, joining Republicans who claimed that the new regulation would expose financial companies to costly class-action lawsuits that rarely deliver significant compensation for plaintiffs. They pointed to a CFPB study that found that consumers who went through a closed-door arbitration process received more than $5,000 on average opposed to $32 in class-action lawsuits."

Slate quotes the NY Times as saying "The [CFPB] found that once blocked from suing, few people went to arbitration at all. And the results for those who did were dismal. During the two-year period studied, only 78 arbitration claims resulted in judgments in favor of consumers, who got $400,000 in total relief.”

NBC News points out "Two Republicans sided with Democrats to keep the rule — Lindsey Graham of South Carolina and John Kennedy of Louisiana." That these GOP defections were not the usual defectors--like McCain, Murkowski, Collins, Snowe, or Paul--but southern conservatives, perhaps indicates the pressure to defect came primarily from trial lawyers--often a particularly strong factor in  otherwise-conservative southern states.

Supreme Court Hears Case on Class-Action Waivers in Arbitration Agreements

Today's oral arguments in Epic Systems Corp. v. Lewis are analyzed by Amy Howe. And Reuters.

HT to Mark Kantor