WASHINGTON (Legal Newsline) - Business and banking interests are working to ensure that an upcoming Senate attempt to rescind the Consumer Financial Bureau Protection’s (CFPB) anti-arbitration rule plays out differently than repeated failures by Senate Republicans to repeal any or all of Obamacare. And they are enlisting help on the state level to do it.

In the most recent attempt in the early hours of Friday morning at rolling back Obamacare, Republican Senators Susan Collins of Maine and Lisa Murkowski of Alaska (along with Arizona’s John McCain) bucked the caucus by voting to block a narrow version of repeal.

Now, the statewide banking and business groups in Maine and Alaska are appealing to Collins and Murkowski to stay with the caucus in a vote to repeal the CFPB’s July 10 anti-arbitration rule that will swing the door wide open for class action suits against financial institutions, and become a boon for the attorneys who bring them.

Senate leaders have yet to schedule a vote on the resolution, S.J. Res. 47. They have 60 session days to act under the Congressional Review Act (CRA) that gives them the authority to block rules enacted by regulatory bodies. That takes them well into October to line up the votes.

Collins and Murkowski are needed for repeal if as expected the vote - as it did in the House on July 25 - goes down party lines. In the House, only one Republican sided with the Democrats in the 231-190 vote.

Banking and business groups say the trouble is that neither Collins nor Murkowski has indicated to them where they stand on the issue. Calls to their Washington offices to determine their positions were not returned.

On July 27, the Alaska State Chamber of Commerce sent a letter to Murkowski and Alaska’s other Senator, Dan Sullivan, urging them to employ the CRA to repeal the rule.

Curtis W. Thayer, president and CEO of the Alaska State Chamber of Commerce, said that they wrote the letter because they heard Murkowski was “undecided.”

“We wanted to make it absolutely clear to her where the business community stands on this,” Thayer said.

He added that he couldn’t imagine any political reason why Murkowski would be against rescinding the rule.

In Maine, there have been indications that Susan Collins is considering a run for governor; Governor Paul LePage’s term ends in 2018.

On Thursday, LePage, in a conversation with a Portland radio station about Collins’s abandoning the party on the Obamacare repeal vote, said, “I think she knows what she’s doing. She’s planning to run for governor.”

Chris Pinkham, president of Maine Bankers Association, said Collins’s position on repeal of the anti-arbitration rule is “simply, unclear.”

“Her focus on the current health care debate has been a significant distraction and although we have been in regular contact with her staff, her voting position on the arbitration rule rollback has not been formally addressed,” he said.

The CFPB rule, the groups say, will benefit a small group of trial lawyers only, not consumers.

In a letter to House leaders on the issue, the Maine Bankers wrote, “according to the CFPB’s own study, in 9 out of 10 class actions, consumers received nothing, and in the remaining cases consumers receive an average of just $32. Compare that to the $5,389-average award in arbitration decisions studied by the CFPB.”

The CFPB itself has also been under fire. The D.C. Circuit Court is reviewing an October ruling by a three-judge panel of the court that declared the structure of the CFPB unconstitutional.

PHH Corporation, a New Jersey mortgage lender that took the consumer bureau to court after it was hit with huge fines, argues that the structure of the agency diminishes the president’s power under Article II of the Constitution to faithfully execute the laws.

In a separate case before the U.S. District Court, the Competitive Enterprise Institute (CEI), the 60 Plus Association, and the State National Bank of Big Spring, Texas are challenging the constitutionality of the Bureau. The groups argue that the structure of the CFPB violates the Constitution's separation of powers because the agency is insulated against meaningful checks by the legislative, executive, and judicial branches of government.

“The CFPB has virtually no accountability,” said Sam Kazman, General Counsel for CEI. “Congress has no control over their budget. They can draw down funds directly from the federal reserve. And the President is only permitted to fire the director for cause.”

In March, 2015 CFPB Director Richard Cordray responded “Why does it matter to you?” when Representative Ann Wagner (R-MO) asked him in a hearing to explain who authorized a $215 million expenditure on the agency’s new headquarters.

“A perfect example of the arrogance that comes with no accountability,” Kazman said.

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Consumer Financial Protection Bureau
1700 G St NW
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