Members of Congress are lining up against the Consumer Financial Protection Bureau’s recent rule regarding banning class-action waivers in arbitration clauses, and some have gone as far as to start the process of having the rule rescinded.
The Congressional Review Act, which was passed in 1996, gives Congress the power to overturn rules issued by federal government agencies. A bill has been proposed in the Senate to repeal the CRA, but until that becomes law, Congress has the power to review the rule on an expedited basis and then overturn it via a joint resolution.
If a rule is overturned via the CRA, the same rule can not be re-issued by the government agency “unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.”
Richard Cordray, the director of the CFPB, acknowledged that Congress may seek to overturn the rule when he made the announcement earlier this week, but Cordray said his job was to protect consumers and the public interest, regardless of what Congress may do.
Sen. Tom Cotton [R-Arkansas] issued the following statement earlier this week: “The CFPB has gone rogue again, abusing its power in a particularly harmful way. The Bureau’s new rule on arbitration clauses ignores the consumer benefits of arbitration and treats Arkansans like helpless children, incapable of making business decisions in their own best interests. This morning I’ve started the process of rescinding this rule using the Congressional Review Act. The last thing Americans need is more anti-business regulation that will prompt frivolous lawsuits while hurting consumers.”
Other members of Congress have made similar statements, according to a report
