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Senate kills CFPB mandatory arbitration ban

Joe Mont | October 25, 2017

A regulatory ban on the mandatory arbitration clauses widely used by financial services firms is now a thing of the past.

The Senate voted Tuesday night to eliminate the Consumer Financial Protection Bureau’s embattled rule. Vice President Mike Pence broke what was a 50-50 split, largely along party lines. Only two Republicans voted against the repeal, South Carolina’s Lindsey Graham and John Kennedy of Louisiana.

The House of Representatives had already voted in favor of the repeal earlier this year.

The Consumer Financial Protection Bureau’s rule banning companies from using mandatory arbitration clauses was finalized in July. I immediately faced repeal under the Congressional Review Act.  It provides a 60-day period following agency publication of a regulation during which an expedited Senate or bicameral vote can halt implementation. If a rule is disapproved after going into effect, it is treated as though it had never taken effect.

“Arbitration...

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