Trump expected to sign repeal of ‘Arbitration Agreements’ rule

Repeal of the “Arbitration Agreements” rule under the Congressional Review Act (CRA) is expected to be signed by President Donald Trump within days, following the Senate vote Tuesday (Oct. 24).

Under the CRA, once a rule is repealed it may not be reissued in substantially the same form – nor may a new rule that is substantially the same be issued – “unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original,” according to the statute, passed in 1996.

The CRA resolution repealing the rule – issued by the Consumer Financial Protection Bureau (CFPB) earlier this year, and which would have allowed consumers to join in class actions over disputes about financial products, including credit cards and bank accounts – was passed by the House earlier this year. The Senate on Tuesday passed the resolution by a one-vote margin (51-50), cast by Vice President Mike Pence.

Before the repeal vote in the Senate, the rule had prompted an unusual face-off between two federal financial regulators, the Office of the Comptroller of the Currency (OCC), and the CFPB. The OCC, in the person of Acting Comptroller Keith Noreika, claimed that the consumer bureau had ignored its own data when promulgating the rule, which the OCC asserted, as a result of its own analysis, “will raise the cost of credit.”

CFPB Director Richard Cordray had countered that the OCC analysis used “flawed statistics” and misstated the effects of the bureau’s arbitration rule on community banks.

In a statement following the repeal vote, Noreika repeated his view that rule would raise the cost of credit for consumers, while not achieving the rule’s goal of deterring future financial abuse. “It is a credit to the economists and other staff at the OCC who, upon reviewing the data and analysis used by the CFPB, identified the rule’s likely significant effect on consumers. By bringing the previously undisclosed data to light, staff ensured a more informed and more transparent discussion of the rule,” Noreika said.

Cordray likewise issued a statement, asserting that “Wall Street won and ordinary people lost,” adding “this vote means the courtroom doors will remain closed for groups of people seeking justice and relief when they are wronged by a company,”

Acting Comptroller of the Currency Issues Statement Regarding the Senate’s Vote to Overturn the Consumer Financial Protection Bureau’s Rule on Arbitration Agreements

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