CURRENT MONTH (December 2017)
Commercial Finance
Congress Overturns CFPB Rule on Arbitration Agreements in Financial Products and Services Contracts
By Jonathan Blackman, Matthew Slater, Carmine Boccuzzi, Inna Rozenberg, and Sharon Barbour, Cleary Gottlieb Steen & Hamilton LLP
On November 1, 2017, President Donald J. Trump signed into law Joint Resolution 111 (H.J. Res. 111), which overturns a rule issued by the Consumer Financial Protection Bureau (CFPB) governing arbitration agreements in consumer finance contracts. The CFPB rule would have prohibited providers of certain consumer financial products and services from including in their contracts arbitration clauses waiving the right to bring class-action lawsuits. H.J. Res. 111 was passed pursuant to the Congressional Review Act (CRA), 5 U.S.C. §§ 801 et seq., a statute that provides Congress with 60 legislative days to introduce a joint resolution overturning an agency’s rulemaking. The CRA had been successfully invoked only once before 2017 to invalidate a regulation promulgated by a federal government agency. H.J. Res. 111 passed in the House of Representatives on July 25, 2017, by a vote of 231–190 and passed in the Senate on October 25, 2017, by a vote of 51–50, with Vice President Mike Pence casting the tie-breaking vote.
