Senate overturns new rule allowing class-action suits against banks
U.S. consumers are on the verge of losing the right to sue their banks and credit card companies through class-action lawsuits.
Vice President broke a 50-50 Senate tie Wednesday night, narrowly approving the repeal of the rule that blocked financial companies from requiring consumers to resolve disputes via individual arbitration proceedings.
The Senate vote followed earlier House approval and now goes to President Trump for expected signing. The action hands Wall Street and the financial industry a victory while dealing a defeat to the Consumer Financial Protection Bureau, the federal watchdog that approved the rule in July.
The bureau is headed by Richard Cordray, an Obama administration appointee who has been targeted for removal by some congressional Republicans. Created as a new safeguard after the national financial crisis, the watchdog agency had moved to ban most mandatory arbitration clauses found in the fine print of agreements that consumers typically agree to automatically and often unwittingly when they open a checking account or get a credit card.
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