As expected, U.S. Sen. Elizabeth Warren (D-Mass) is not going to let the CFPB’s final rule on arbitration agreements go down without a fight. The ranking member of the Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protections wants big banks—not just their lobbyists—to address the issue.
In her 64-page letters sent out on Aug. 10, Sen. Warren noted that “a number of lobbying groups representing big banks and financial firms have condemned the rule, asserting that it will harm consumers . . . These organizations represent your bank and your industry, but you—and other CEOs of large banks—have remained silent on the rule.”
Sen. Warren is requesting information on the banks’ stances on the arbitration rule, along with data on the firms’ use of arbitration clauses in consumer agreements and the outcomes of arbitration proceedings.
She has asked for responses by Sept. 1 “because Republicans in Congress have introduced a resolution to reverse the CFPB rule using the fast-track Congressional Review Act [CRA] process.”
The House already passed its CRA resolution (HJR 111) to repeal the arbitration rule, but its companion resolution in the Senate (SJR 47) may be tougher to get through, particularly because a number of Republicans remain undecided on the issue.
The CRA enables Congress to repeal regulations within 60 legislative days of their publication in the Federal Register with a simple majority vote in both houses and a presidential signature. The CFPB released its final rule on arbitration on July 10. If CRA resolutions are successful, the CFPB would be barred from issuing future regulations on arbitration.
The letters were sent to the heads of JP Morgan Chase, Bank of America, Wells Fargo & Company, Citigroup Inc., U.S. Bancorp, PNC Financial Services Group Inc., TD Group US Holdings, Capital One Financial Corporation, HSBC North America Holdings, Charles Schwab Corporation, BB&T Corporation, Suntrust Bank, Barclays US, Ally Financial Inc., American Express Co. and Citizens Financial Group.
- House Passes CRA Repeal of Arbitration Rule
- Congressional Republicans Look to Dismantle CFPB’s Arbitration Rule
- CFPB Issues Final Arbitration Rule