Cotton says he will move to halt consumer watchdog rule
WASHINGTON — Republican lawmakers have overturned more than a dozen regulations issued under President Barack Obama. Now, they’re looking to do the same to a rule issued Monday that would let consumers band together to sue their banks or credit card companies rather than use a mediator to resolve a dispute.
The effort would be a first for this Republican-led Congress — overturning a rule issued during the presidency of Donald Trump.
Two GOP senators, Tom Cotton of Arkansas and Mike Crapo of Idaho, said Tuesday they intend to seek the repeal of the regulation through the Congressional Review Act, a law that allows Congress to review new federal regulations issued by government agencies and overturn them with a simple majority.
Of course, the Trump administration isn’t particularly fond of the Consumer Financial Protection Bureau, which issued the rule. The administration has called for the agency’s restructuring and the president’s budget calls the agency an “unaccountable bureaucracy.”
Before Trump came into office, the two-decade-old law had only been used once before to stop a federal regulation from going into effect. But earlier this year, Congress overturned 14 Obama-era rules on a variety of topics, from guns and the environment, to education and retirement plans. By stopping new rules through the Congressional Review Act, Congress also prevents agencies from issuing “substantially similar” regulations in the future.
The Consumer Financial Protection Bureau issued the rule to make it easier for consumers to band together when harmed by a financial service provider. The rule bans most types of mandatory arbitration clauses, which require credit card or bank customers to use a mediator when they have a dispute — often giving up their right to sue in court.
“People who would otherwise have to go it alone or give up, will be able to join with others to pursue justice and some remedy for their harm,” the agency said on its web site in explaining the rule.
In announcing that he would seek the rule’s repeal, Cotton said the agency has “gone rogue again.”
Crapo, the chairman of the Senate Committee on Banking, Housing and Urban Affairs, told reporters he would initiate a similar effort.
“Driving dispute resolutions into class actions is probably harmful to consumers rather than helpful to consumers, so I just believe that we need to have a much more effective tool to address concerns that are raised with arbitration,” Crapo said.
If Republicans move forward with repealing the rule, Democrats would likely seek to turn the populist issue into an advantage heading into the 2018 elections.