President Donald Trump signed a resolution on Wednesday to officially revoke the Consumer Financial Protection Bureau’s highly contested arbitration rule.
Ever since the bureau unveiled the rule in July, it’s been an uphill climb for the CFPB and Democrats to stop Republicans from overturning it.
The main intention of the rule was to ban companies from using mandatory arbitration clauses and allow consumers to participate in class action lawsuits.
The now overturned rule mainly impacted consumer financial products like credit cards and bank accounts that have arbitration clauses in their contracts that prevent consumers from joining together to sue their bank or financial company for wrongdoing.
However, the rule was not applicable to mortgage finance since Congress already prohibits arbitration agreements in the residential mortgage market.
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, one of the strongest opponents against the bureau’s rule, said on the news, “Overturning the CFPB’s harmful regulation is a decisive victory for consumers and our economy.”