Rolling with the Punches: CFPB vs. GOP
Boxing is at the forefront of the sports world these days with two upcoming, high-profile fights: (1) Mayweather vs. McGregor; and (2) Canelo vs. Golovkin. The former features a UFC lightweight champion, McGregor, and arguably the greatest boxer of his generation, Mayweather, who sports a 49-0 record. The latter pits against each other two boxers who, combined, have won over eighty fights and lost only one. Beyond these sporting events, another fight has been dominating headlines: CFPB vs. GOP. This blog has been covering the Consumer Financial Protection Bureau and attacks on it by Republicans and the Grand Old Party (here, here, here, here, and here. Much like a boxing match, it was only a matter of time before the CFPB and the GOP started throwing haymakers and looking for a knockout.
On July 10, 2017, the CFPB announced a rule banning many mandatory arbitration clauses in new contracts with financial institutions like banks, credit card companies, and student lenders. Essentially, the rule allows consumers to join a class action lawsuit when they have a dispute with the institutions rather than being forced into individual arbitrations in all instances. The CFPB Director, Richard Cordray, said “Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong.” Wexler Wallace LLP supports the work of the CFPB and stands behind opportunities for consumers to collectively pursue relief against wrongdoers.
Almost immediately after the rule’s announcement, Republicans and the GOP fought back. For example, Texas Representative Jeb Hensarling said the rule “should be thoroughly rejected by Congress.” The Chamber of Commerce added, “The C.F.P.B.’s brazen finalization of the arbitration rule is a prime example of an agency gone rogue.” The House Appropriations Committee then passed the Financial Services Appropriation Bill, which seeks to repeal the CFPB’s authority to regulate arbitration, among other things.
This fight is far from over, because the House Appropriation Committee’s actions must continue through the legislative process. Also, the GOP can still try to use the Congressional Review Act to throw out any federal regulation issued within the last 60 days. Stay tuned, and if you’d like to jump into the fray, you should contact your members of Congress.