The Senate could vote as early as today on legislation that would make it a lot harder for consumers to bring class-action lawsuits against financial companies. The vote would essentially void a rule issued by the Consumer Financial Protection Bureau in July that prevents companies from including a ban on class-action lawsuits in their consumer contracts, requiring instead individual arbitration to resolve consumer disputes with financial companies.
The House has already passed its own bill to thwart the CFPB rule, and now the Senate is set to do the same, possibly as early as today, according to Michael Best, director of advocacy research at the Consumer Federation of America. ThinkAdvisor contacted the Senate leadership office about the expected timing of a vote but hadn’t heard back by press time.
Only a simple majority vote by the Senate is required to pass the legislation, known as S. J. Res. 47, a joint resolution by the House and Senate to nullify the CFPB rule regulating the use of arbitration agreements. Under the Congressional Review Act passed in 1996, Congress or the president can reverse agency rules by a majority vote not subject to a filibuster.
Senate Republicans are supported in their effort to overturn the CFPB rule by a Treasury report released Monday that predicts it will lead to 3,000 additional class-action suits over the next five years, costing financial services firms hundreds of millions of dollars in legal defense fees.