A new resolution introduced by Sen. Lindsey Graham would cancel the major new federal regulations on payday lending being rolled out by the Consumer Financial Protection Bureau.
The South Carolina Republican filed the resolution Friday, just under the deadline for potentially undoing the rule under the Congressional Review Act, which provides a mechanism for Congress to eliminate regulations with a simple majority vote in the House and Senate. A companion resolution was already filed in the House with some Democratic support.
The possibility of Congress canceling the rule through a CRA resolution is just one of the threats facing the payday rule, which was finalized in October under Obama-appointed Director Richard Cordray. Mick Mulvaney, the acting director of the bureau appointed by President Trump after Cordray stepped down, has also moved to rewrite the rule before it fully goes into effect next year.
“The harmful actions of the CFPB that were perpetrated during the prior administration must be corrected, and we applaud the Senate for doing their part to pass the CRA and stop his harmful rule,” said Ed D’Alessio, executive director of the Financial Service Centers of America, an industry group.
Critics of the rule may struggle to find 51 votes in the Senate to cancel it. Republicans have 51 votes in the upper chamber, and it’s far from clear that all of them would vote to eliminate the rule or that any Democrats would join them.
Yet Republicans have been highly successful at sending CRA resolutions to Trump’s desk. In October, they surprised some observers by finding 50 votes to undo a new rule that would have allowed for more class-action lawsuits against financial companies. Vice President Mike Pence cast the deciding vote.
In that case, Graham sided against the financial industry, voting “no” on the resolution.
A floor vote would invite fierce lobbying from both sides.
“The consumer bureau’s rule would help free people from this suffocating debt trap, and its efforts are supported [by] people all across this country including veterans’ groups, faith leaders, civil rights organizations, consumer advocates, and many more,” Center for Responsible Lending Federal advocacy director Scott Astrada said in opposing Graham’s resolution. “Congress should stop defending the payday lenders and reject this misguided resolution.”
