On Tuesday, House Republicans cast their votes regarding a new rule that came from the Consumer Financial Bureau. The proposals gained controversial proportions as it would have allowed consumers to sue banks directly in class-action suits. However, the majority decided to kill this initiative off.
Republicans’ Efforts Against the Arbitration Clause Will Need Almost Full Support from Senate
On Tuesday, lawmakers voted in conformity with the Congressional Review Act. This legal text offers them 60 days to decide whether to go on with the newly released legislations or not. On top of that, the outcome of this vote is decisive for other future similar rules as well.
As far as the consumer watchdog’s proposal is concerned, it received 231 to 190 against it. Republican Walter Jones was the only one who voted against a repeal along with all Democrats. However, the decision is not final just as yet. They need near-unanimous support from Senate for the resolution to reach the upper chamber.
On the other hand, the White House confirmed that it is ready to sign the repeal the moment it gets on President’s desk. Donald Trump is a strong supporter of the repeal resolution. This determination dates back a while ago when Republicans and consumer watchdog revealed their relentless conflict. There are many other strategies set in place to dent the power of the Consumer Financial Protection Bureau.
Each Contract with a Financial Institution Won’t Allow Clients to Sue Banks
The proposal would have reversed a common feature almost all consumers have to agree with the moment they sign a new contract with a bank. This is about an arbitration clause which forces clients to settle their issues with the institution in private. This allowed banks to avoid appearing in front of the court. On top of that, almost all cases ended up with minimum prejudices that banks have to cover.
Therefore, the new legislation would have enabled customers to sue banks at a courthouse. On top of that, a class-action suit would have been possible in case of a minor harm that can mobilize a group of complaining parties against one institution.
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