The Senate voted to kill a controversial rule that made it easier for Americans to band together and sue their banks and credit card companies to resolve financial disputes. Vice President Mike Pence cast the deciding vote to break a 50-50 tie, NBC News reports.
The regulation was unveiled in July by the Consumer Financial Protection Bureau and the banks have lobbied very hard to roll it back. The measure is now headed to President Donald Trump’s desk for his signature. The vote is a reflection of the effort of the Republicans to undo regulations that they consider to be harmful to the market.
The rule would ban most of the mandatory arbitration clauses found in the fine print of agreements that consumers enter into when opening checking accounts or getting credit cards.
Democrats said that the Bureau’s rule would have given consumers more leverage to stop companies from financial wrongdoing and cited some examples of misdeeds that could be shielded through forced arbitration.
“So who does forced arbitration help? Wall Street banks and other huge corporations that never pay the price for cheating working people,” said Senator Sherrod Brown.
On the other hand, the Republicans argued that the arbitration system has worked wonderfully for the consumers.
According to the Democrats, the consumers usually don’t have time and means to pursue claims in arbitration. They said that the consumers generally give up because most of the disputes revolve around small amounts. Banks and other financial companies know that they won’t have to pay a real price for taking advantage of the consumers, the Democrats say.
“Once again, we’re helping the powerful against the powerless,” Senate Democratic leader Chuck Schumer said.
The Republicans Lindsey Graham and John Kennedy sided with Democrats and opposed the resolution.
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