House Republicans moved Monday evening to cancel a rule liberalizing class-action lawsuits against banks issued by an Obama-appointed regulator, as the Trump administration announced that he supported the GOP effort.
The House Rules Committee Monday evening gave the go-ahead for a floor vote to kill the Consumer Financial Protection Bureau's newly finalized mandatory arbitration rule.
The rule would prevent banks and financial firms for including clauses in contracts that prevent consumers from engaging in class-action lawsuits, instead requiring mandatory arbitration.
Republicans are advancing a challenge under the Congressional Review Act that would allow them to cancel the rule through a resolution that cannot be filibustered in the Senate.
The White House said the "harmful rule would benefit trial lawyers by increasing frivolous class-action lawsuits," and indicated that Trump would sign the resolution undoing it.
Bank, credit union, and payment card company trade groups urged Congress Monday to approve the GOP resolution.
Speaking at Monday's Rules Committee hearing, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, said that "in a representative democracy, no one, unelected, unaccountable individual should, with a stroke of a pen, be allowed to abrogate our fundamental contractual rights," referring to CFPB Director Richard Cordray.
While the resolution is likely to clear the House, it faces dicier prospects in the Senate. There, consumer advocates who back the rule hope that moderates will prevent the measure from reaching Trump's desk.