Pence breaks tie to nix Obama-era consumer arbitration rule

Vice President Pence joined with Senate Republicans to nix a controversial consumer bureau rule banning companies from using forced settlements to resolve disputes with customers.

 

Senators voted 50-50 on the resolution of disapproval. GOP Sens. Lindsey GrahamLindsey Olin GrahamBrown says Graham yelled at officer for not doing 'enough' to protect senators Lawmakers briefed on 'horrifying,' 'chilling' security threats ahead of inauguration Trump's legacy is discord and division MORE (S.C.) and John KennedyJohn Neely KennedyMORE (La.) joined with Democrats to oppose cutting the Obama-era rule. 

 

Pence then took over the presiding officer's chair and cast the tie-breaking vote to make the total 51-50. 

 

Republicans used the Congressional Review Act, which gives them 60 legislative days to repeal an executive branch rule after it's finalized with a simple majority. 

 

The Consumer Financial Protection Bureau's rule would ban banks and credit card companies from using clauses in customer contracts that protect them from class-action lawsuits. 

 

So-called forced arbitration clauses require customers to resolve any disputes with the firm through a third-party mediator and bans them from suing the company.

 

Democrats argue nixing the rule would be a boon to Wall Street and financial institutions, who have warned that the regulation could force them to spend money on costly lawsuits. 

 

"Our job is to look out for the people whom we serve, not to look out for Wells Fargo, not to look out for Equifax, not to look out for Wall Street banks, not to look out for corporations who scam consumers," Sen. Sherrod BrownSherrod Campbell BrownOn The Money: Sanders will be gatekeeper for key Biden proposals | Senate majority gives Biden path to student loan forgiveness | Confirmation hearing for Yellen expected next Tuesday Brown puts housing, eviction protections at top of Banking panel agenda Brown says Graham yelled at officer for not doing 'enough' to protect senators MORE (D-Ohio) said ahead of the vote. 

 

Democrats on Tuesday spoke on the Senate floor for hours against the rule. 

 

Sen. Elizabeth WarrenElizabeth WarrenTwitter trashes conservatives as @Jack gloats — this won't end well for Twitter Deutsche Bank rules out future business with Trump, company Earmarks can lead to legislating, which can lead to healing MORE (D-Mass.) aimed her appeals to squash the rule directly at President Trump. 

 

"President Trump, Mike PenceMichael (Mike) Richard PenceHouse passes measure calling on Pence to remove Trump Trump told Pence he could be a 'patriot' or 'p----' when overseeing election vote: report READ: Pence letter to Pelosi rejecting calls to invoke 25th Amendment MORE works for you. ... You've gone on and on and on about how strong you are, about how tough you are, and about how you are going to stand up to Wall Street," she said. 

 

Brown, wrapping up the Democrats' floor speeches, noted that Pence had just arrived in the Capitol. 

 

"The vice president only shows up in this body when the rich and powerful need him," he said. 

 

The rule forces companies to write arbitration clauses in ways that would not prevent consumers from joining class-action lawsuits. Republicans and business groups have criticized the rule, claiming it would help no one but trial lawyers. 

 

Sen. John CornynJohn CornynRick Scott will 'likely' join challenge to election results Former NY GOP gov calls election challenges 'grave threat to our freedom' Pence told Trump he doesn't have power to block certification of Biden win: report MORE (R-Texas) fired back that Senate Minority Leader Charles SchumerChuck SchumerWoman interrupts Schumer press conference, calls him 'racist anti-Semite' Overnight Energy: EPA rule exempts many polluting industries from future air regulations | Ex-Michigan governor to be charged over Flint water crisis: report | Officials ousted from White House after papers casting doubt on climate science Senate to be briefed on inauguration security after Capitol attack MORE (D-N.Y.) and Democrats are trying to "cry crocodile tears."

 

"Not everybody can afford to be O.J. Simpson and hire the very best lawyers in America and to try a case for weeks on end at a cost of millions of dollars," he added. 

 

The Treasury Department and Comptroller of the Currency have also criticized the rule, warring with CFPB Director Richard Cordray and top Democratic lawmakers in op-eds and interviews.

 

Cordray knocked lawmakers after the vote, saying, "Wall Street won and ordinary people lost."

 

"This vote means the courtroom doors will remain closed for groups of people seeking justice and relief when they are wronged by a company. It preserves a two-tiered justice system where banks can have their day in court but deny their customers the same right. ... I urge President Trump to stand with consumers and veto this resolution," he said in a statement.

 

A Treasury Department analysis of the rule released earlier this week argued the measure would lead to 3,000 more class-action suits over the next five years.

 

The CFPB said Treasury's report "rehashes industry arguments” that were ”solidly refuted in the final rule."

 

Tuesday's vote was widely expected to come down to a handful of moderate GOP senators. In addition to Kennedy and Graham, GOP Sens. Lisa MurkowskiLisa Ann MurkowskiMcConnell won't reprise role as chief Trump defender GOP Sen. Tim Scott opposes impeaching Trump Republicans eye primaries in impeachment vote MORE (Alaska), Susan CollinsSusan Margaret CollinsMcConnell won't reprise role as chief Trump defender Trumpism must not become the new McCarthyism Republicans wrestle over removing Trump MORE (Maine) and Rob PortmanRobert (Rob) Jones PortmanMcConnell won't reprise role as chief Trump defender GOP senator to Trump: Urge peace or bear responsibility for additional attacks Two Senate committees vow probe of security failure during Capitol riots MORE (Ohio) did not say ahead of time how they would vote.