On Tuesday, Oct. 24, , the U.S. Senate voted 51-50 (with Vice President Pence breaking the tie) to strike down a rule issued by the Consumer Financial Protection Bureau (CFPB) that prevented banks, educational institutions and other businesses from including arbitration clauses in consumer contracts that bar consumer class action lawsuits. The Senate vote followed a prior vote in the House to overturn the rule. The White House said Trump “applauds” Congress for voting to repeal the rule, which would have given consumers “fewer options for quickly and efficiently resolving financial disputes.”

The proposed rule had a troubled and lengthy history. In 2010, as part of the Dodd-Frank reforms, Congress created the CFPB and directed the new agency to study and promulgate regulations on the use of mandatory arbitration provisions in consumer financial contracts. The CFPB released its study in 2015. It criticized mandatory arbitration provisions and specifically called out the use of class action waivers. In July 2017, the CFPB issued a rule that prohibited “providers of certain consumer financial products and services” from including class action waivers in arbitration agreements. By the time the CFPB rule which resulted from the underlying study was finally issued, the Trump Administration and a new Congress were in power. Once the rule came into effect, the Trump Administration and Congress immediately spoke out against it, resulting in the recent House vote.

Additionally, a collateral attack on the rule started on September 29, 2017, when the U.S. Chamber of Commerce and other organizations filed suit in federal court in Texas claiming the rule violates both the Administrative Procedures Act and the Dodd-Frank Act because it fails to advance the public interest or consumer welfare.