Consumer Bureau Loses Fight to Allow More Class-Action Suits<br />The consumer bureau has unusually broad authority —<br />and autonomy from both the White House and Congress — to enforce existing federal laws and write new regulations, like the arbitration rule.<br />This week, the department weighed in directly on the arbitration rule, warning<br />that the regulation could unleash frivolous lawsuits, costing financial firms an estimated $500 million in legal fees alone.<br />For decades, credit card companies and banks have inserted arbitration clauses into the fine print of financial contracts to circumvent the courts<br />and bar people from pooling their resources in class-action lawsuits.<br />He also expressed surprise at the report, noting that during his agency’s work<br />on arbitration, the Treasury “raised no issues or concerns with the bureau.”<br />The friction is intensifying as Mr. Cordray’s tenure at the bureau is ending.<br />Senate Republicans voted on Tuesday to strike down a sweeping new rule<br />that would have allowed millions of Americans to band together in class-action lawsuits against financial institutions.<br />In the weeks leading up to the vote, Senator Lindsey Graham, Republican of South Carolina, who sponsored legislation<br />to protect military members from being forced into arbitration, said he would not support a repeal of the rule.
