Vice President Casts Deciding Vote To Overturn CFPB's Proposed Arbitration Rule

Seyfarth Synopsis: Financial institutions can maintain the status quo of their pre-dispute resolution clauses in consumer contracts because Senate voted against CFPB's proposed arbitration rule.

In a 51 - 50 vote, on October 24, 2017, the Senate passed H.J.Res.111, which provided for congressional disapproval of the Consumer Financial Protection Bureau's ("CFPB") proposed rule relating to arbitration agreements. Under the CFPB's rule, companies would have been prohibited from including pre-dispute arbitration clauses in customer agreements that precluded a consumer from joining class actions. The CFPB justified the rule in part because of its own study that concluded that group lawsuits have greater success than individual actions, especially arbitration proceedings.