Isakson, Perdue Take Action to Protect Legal Options for Consumers
WASHINGTON – U.S. Senators Johnny Isakson, R-Ga., and David Perdue, R-Ga., joined Senate Banking Chairman Mike Crapo, R-Ind., this week in taking action to stop a government agency from implementing a final rule that discourages consumers and companies from settling their differences outside of the courtroom.
To help protect consumers, the senators are filing a Congressional Review Act joint resolution of disapproval against the Consumer Financial Protection Bureau’s (CFPB) arbitration rule, which prohibits the use of pre-dispute arbitration agreements and ultimately encourages class action lawsuits. The Consumer Financial Protection Bureau issued this rule despite its own study showing that arbitration procedures actually result in consumers receiving larger and faster compensation payments than class actions. The Congressional Review Act, known as a CRA, permits Congress to overturn an agency rule by a simple majority vote within 60 legislative days after a final rule has been submitted to Congress.
“The Consumer Financial Protection Bureau has overstepped its authority yet again with another punitive rule that would benefit trial lawyers but ultimately harm both consumers and job creators,” said Isakson. “This resolution of disapproval will help stop another burdensome government regulation, and I urge my colleagues to support it.”
“It makes no sense for the CFPB to issue a regulation that discourages arbitration, which has been used as a cost-effective method to resolve disputes,” said Senator Perdue, a member of the Senate Committee on Banking. “There’s only one group that will benefit from this rule and that’s trial lawyers, not consumers. I applaud Chairman Crapo for putting consumers first and taking action to eliminate this rule.”
“Members of Congress previously expressed concerns with the proposed version of the rulemaking – concerns that were not addressed in the final rule,” said Senate Committee on Banking Chairman Crapo. “The rule is based on a flawed study that leading scholars have criticized as biased and inadequate, noting that it could leave consumers worse off by removing access to an important dispute resolution tool. By ignoring requests from Congress to reexamine the rule and develop alternatives between the status quo and effectively eliminating arbitration, the CFPB has once again proven a lack of accountability. Given the problems with the study and the Bureau’s failure to address significant concerns, it is not only appropriate but incumbent on Congress to vote to overturn this rule.”
In addition to Senators Isakson, Perdue and Crapo, original cosponsors of the measure include Senators John Barrasso, R-Wyo., Roy Blunt, R-Mo., Shelley Moore Capito, R-W.V., Thad Cochran, R-Miss., Bob Corker, R-Tenn., Tom Cotton, R-Ark., Ted Cruz, R-Texas, Mike Enzi, R-Wyo., Orrin Hatch, R-Utah, Dean Heller. R-Nev., James Lankford, R-Okla., Jerry Moran, R-Kansas, Mike Rounds, R-S.D., Marco Rubio, R-Fla., Ben Sasse, R-Neb., Tim Scott, R-S.C., Richard Shelby, R-Ala., Luther Strange, R-Ala., Thom Tillis, R-N.C., Pat Toomey, R-Penn., and Roger Wicker, R-Miss.