How Does Congress's Action Impact the CFPB's Ability to Prohibit Arbitration Clauses? | Auto Finance News | Auto Finance News

How Does Congress’s Action Impact the CFPB’s Ability to Prohibit Arbitration Clauses?

© Can Stock Photo / kvkirillov

In a nail-biter of a session, the Senate voted late in the evening on Oct. 24, to invalidate the Consumer Financial Protection Bureau’s recently finalized arbitration rule. The vote on the joint resolution — which had passed the House earlier this year — was 51 to 50 with Vice President Mike Pence assuming the gavel and breaking the tie at 10:10 p.m. EDT. All but two Republicans voted in favor of the resolution; Lindsey Graham of South Carolina and John Kennedy of Louisiana joined the 48 Democrat senators in voting to keep the arbitration rule intact. The joint resolution then went to the White House, where President Donald Trump signed it, officially marking the arbitration rule as dead.

Congress’s ability to invalidate the rule was made possible by the Congressional Review Act (CRA), signed into law by President Bill Clinton in 1996. The law created an expedited legislative process by which Congress could review — and overrule — new federal regulations by passing a joint resolution by a simple majority that is subsequently signed into law by the president.

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