Invoking its authority to review federal regulations under the Congressional Review Act, the Senate voted 51-50 on October 24 to invalidate the Consumer Financial Protection Bureau’s anti-arbitration rule. Vice President Pence cast the tiebreaking vote. Aimed to “restore consumers’ right to file or join group lawsuits,” the rule would have effectively banned the consumer financial services industry from using pre-dispute arbitration clauses in prospective agreements to block consumer class action claims. The House previously voted 231-190 in late-July to repeal the rule. The resolution will now head to the White House for President Trump's signature, which is expected given his statement applauding Congress’s efforts to repeal the rule.
If signed by the president, the resolution will restore the status quo, and clauses mandating individual arbitration in existing and future contracts will generally remain viable. Our attorneys are happy to review any existing and proposed arbitration language to ensure enforceability.