Murray Silverstein and Jacob Boehner
On Wednesday, President Trump signed a joint resolution, H.J. Res. 111, which was
passed by both the House and Senate, rejecting the Consumer Financial Protection Bureau’s (“CFPB”) final rule banning the use of pre-dispute arbitration clauses in consumer arbitration agreements in order to block consumers from bringing class action lawsuits. The House and the Senate utilized the Congressional Review Act (“CRA”), which permits the nullification of any rule passed by a federal agency after achieving a simple majority vote by each house of Congress. The President signed the resolution even after receiving a letter from CFPB Director Richard Cordray, which implored him to uphold the CFPB’s final rule.
In his letter, Cordray emphasized how repealing the final rule will adversely affect members of the military. His claim was erroneous, however, considering that the Military Lending Act prohibits the use of mandatory arbitration clauses and class action waivers in consumer agreements with members of the armed forces. Despite Cordray’s letter, President Trump’s decision to sign the resolution was long considered a formality as he both criticized the CFPB’s final rule prior to the Senate’s vote for nullification and praised the Senate’s successful vote, indicating his intention to sign the resolution as soon as it hit his desk. The nullification of the CFPB’s final rule has long-term implications going forward, as the CRA prohibits the CFPB from reissuing the rule and also prevents the CFPB from issuing a new rule that is substantially similar to the repealed rule without express authority from Congress, which does not appear to be forthcoming.
Greenspoon Marder Client Alert: Senate Votes To Rescind CFPB’s Final Arbitration/Class Action Waiver Rule
*The information in this article is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Greenspoon Marder, P.A., In New York, Greenspoon Marder, P.A. practices under the name Greenspoon Marder, P.A. P.C. In California, Greenspoon Marder LLP practices using the fictitious name and trademark Greenspoon Marder under license from Greenspoon Marder, P.A., or the individual author(s), nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
About Greenspoon Marder
Greenspoon Marder is a national full-service business law firm with 240 attorneys and 26 locations across the United States. We are ranked amongst
American Lawyer’s Am Law 200, as one of the top law firms in the U.S. since 2015. Since our inception in 1981, our firm has been committed to providing excellent client service through our cross-disciplinary, client-team approach. Our mission is to understand the challenges that our clients face, build collaborative relationships, and craft creative solutions designed and executed with long-term strategic goals in mind. We serve Fortune 500, middle-market public and private companies, start-ups, emerging businesses, individuals and entrepreneurs nationwide.
Natalie Villanueva, Director of Marketing
954.333.4308 | email@example.com
This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.