After months of speculation, the Senate voted tonight to strike down the CFPB’s controversial Arbitration Rule pursuant to the Congressional Review Act (CRA). Since the House voted to repeal the Rule back in July, the repeal now heads to the President, who is expected to sign it promptly. Once signed into law, the CRA repeal strikes down the rule and prevents the Bureau from issuing a substantially similar rule. This should remove any threat to the validity of arbitration agreements in financial services contracts for the foreseeable future.
While under the CRA only a bare majority of the Senate had to vote against the Rule for the repeal to pass, there had been widespread debate as to whether the Republicans had sufficient votes. In the end, the Senate deadlocked 50-50, with Vice President Pence breaking the tie in favor of disapproving of the rule. Notably, this vote comes just a day after the Treasury Department issued a scathing critique of the Rule, which itself followed widespread criticism of the Bureau’s process and conclusions, including by the OCC.