Senate Republicans on Tuesday night leaned on a tie-breaking vote from Vice President Mike Pence to kill a landmark financial regulation that restricts banks and credit card companies from imposing mandatory arbitration on their customers as a means to resolve disputes.
The vote is a blow to the Consumer Financial Protection Bureau and its controversial director, Richard Cordray, who some Republican lawmakers have urged President Donald Trump to fire because of his aggressive regulation.
“It’s really a rogue agency,” Senate Majority Whip John Cornyn said on the Senate floor.
The lawmakers narrowly passed a resolution to scrap the so-called arbitration rule after months of uncertainty about whether enough GOP senators would support the effort, which was opposed by consumer and veterans groups. Sens. Lindsey Graham (R-S.C.) and John Kennedy (R-La.) broke with their party to vote against the repeal.
Republicans took advantage of a time-limited window under the Congressional Review Act that allows them to undo certain regulations using their majority alone without needing assistance from Democrats, who fought the repeal.
Tension was high until the end. Just after 10 p.m., Sen. Lisa Murkowski (R-Alaska), seen as a potential swing vote, was the last senator to vote in favor of the rule, setting up the tie-breaker by Pence.
The move was congressional Republicans’ most far-reaching victory yet this year in their effort to roll back financial regulations and diminish the consumer watchdog bureau, an agency that the GOP has fought since its creation through the 2010 Dodd-Frank law.
“This rule is just the most recent demonstration of its continued lack of accountability,” Sen. Mike Crapo, the chairman of the Banking Committee, said.
GOP lawmakers argued that the regulation above all else was meant to promote class action lawsuits and would enrich lawyers, rather than help consumers who could perhaps get a better deal if they resolved problems with banks in private arbitration.
Democrats tried to make the case that it was about ensuring that consumers had the right to fight wrongdoing by financial institutions in court, and they argued that arbitration would still be a voluntary option under the rule.
The resolution will now go to Trump, whose administration gave Republicans cover to undo the rule with a report this week claiming that the CFPB failed to take into account all the costs of the regulation. House Republicans agreed to kill the rule in July.
Democrats said Republicans were doing the bidding of big corporations. In a statement after the vote, Cordray said, “Wall Street won and ordinary people lost.”
“The vice president only shows up in this body when the rich and the powerful need him,” Sen. Sherrod Brown (D-Ohio) said.
Business groups including the U.S. Chamber of Commerce, the American Bankers Association and the Financial Services Roundtable have been challenging the regulation in court.
Democrats invoked the fake account scandal at Wells Fargo, the nation’s third-largest bank, and the massive consumer data breach at Equifax to try to demonstrate that the rule is necessary.
Brown cited onetime Fox News host Gretchen Carlson, who had been calling on senators to keep the mandatory arbitration ban in place after her experience suing former Fox News CEO Roger Ailes for sexual harassment.
“This vote is all about a consumer’s right to a day in court,” Brown said.