CFPB arbitration rule is overturned

In October, American Banker reported that the Senate voted 51 to 50 to repeal the Consumer Financial Protection Bureau’s (CFPB) rule banning mandatory arbitration clauses in financial contracts. The rule, which was released in July, would have prevented banks, credit unions and other lenders from requiring customers to use the arbitration process to resolve disputes, stopping them from filing class-action lawsuits. To overturn it, Senate Republicans used an obscure legislative process called the Congressional Review Act, which allows lawmakers to overturn a recently finalized rule by a majority vote. President Trump signed a resolution on November 1, 2018 to officially revoke the arbitration rule.