Pence Breaks Tie, Senate Votes to Repeal Arbitration Rule

Barely one day after the U.S. Department of the Treasury issued a report on the likely monetary and compliance impacts of the new regulation, a split 50-50 Senate led Vice President Pence to cast the deciding vote in favor of repealing the Consumer Financial Protection Bureau’s (CFPB) recent rule limiting mandatory arbitration clauses financial service agreements. Two Republican Senators voted against repealing the consumer protection measure, Lindsey Graham (SC) and John Kennedy (LA), which forced Pence to step in for the tiebreaker. A similar resolution to repeal the rule was passed by the House along party lines back in July.

Congressional Republicans were always expected to mount a charge to repeal the arbitration rule since it was published in July. On the day before the rule was issued, House Financial Services Committee Chairman Jeb Hensarling (R- TX) threatened to hold CFPB Director Richard Cordray in contempt if the consumer watchdog published the rule. It was not the first time Cordray had been threatened with contempt, although Congress has yet to bring any charges against the beleagured bureaucrat.

Cordray lamented the Senate vote, arguing, “It robs consumers of their most effective legal tool against corporate wrongdoing. As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”

The repeal will now go to President Trump’s desk, where he is expected to end the arbitration rule.