WASHINGTON — Sen. Tom Cotton, R-Ark., plans on leading Republican efforts to overturn the Consumer Financial Protection Bureau’s rule governing arbitration agreements and said Wednesday that a few Democrats might help the effort.
“There is no reason in my opinion this can’t be a bipartisan effort,” Cotton said at the U.S. Chamber of Commerce. “At least a few Democrats realize the need to reverse this rule.”
Cotton did not name any Democrats, but observers have said convincing even moderate members of the party to support repealing a CFPB rule may be an uphill battle.
The CFPB’s rule would make it easier for consumers to file class-action lawsuits by regulating arbitration agreements that are often embedded in financial contracts. But the bureau’s own study found that consumer disputes are often resolved faster and provide more compensation using the arbitration process.
“If you look at the evidence, arbitration is good for the real little guy,” Cotton said.
He also suggested that the CFPB didn’t pursue other potential versions of the rule because the bureau’s director, Richard Cordray, was pandering to trial lawyers who are often the biggest winners from class-action lawsuits.
“All of those alternatives wouldn’t have produced good donations for someone’s campaign for governor of Ohio,” Cotton said in reference to persistent speculation that Cordray plans to enter the Ohio gubernatorial race.
Republicans plan on using the Congressional Review Act to reject the arbitration rule. The procedure had only been used once prior to President Trump’s election, but has been used 14 times since to overturn rules promulgated under President Obama. The law allows Congress to reject an agency rule via majority vote within 60 legislative days of being finalized.
“I am working with [Senate Banking Committee Chairman Sen. Mike Crapo, R-Idaho] and [the] Banking Committee to get the 50 votes we need to overturn this rule,” Cotton said. He added that he hopes the House will take up a similar measure next week.
Cotton has often been critical of the CFPB and has been a proponent of having Congress control the bureau's budget rather than allowing the Federal Reserve Board to fund it off-budget.
But he didn’t go as far as some Republicans in calling to abolish the bureau altogether.
“I can see the need for an agency that would provide sort of a one-stop shop for consumer where they report abuse, fraud, harassment,” Cotton said.
