The anti-arbitration rule issued by the Consumer Financial Protection Bureau in July is now just one short step away from elimination.

The Senate tonight voted 51-50 (with Vice President Pence casting the deciding vote) to invalidate the CFPB’s rule under the Congressional Review Act (“CRA”). That vote follows the House of Representatives’ disapproval of the rule in July.

The last remaining step is the President’s signature on the legislation, which seems highly likely given the Administration’s statement today (pdf) urging the Senate to invalidate the rule.

The President’s approval will trigger two provisions of the CRA.

First, the rule
Continue Reading Congress votes to invalidate CFPB’s anti-arbitration rule

The rule (pdf) just proposed by the Consumer Financial Protection Bureau to regulate arbitration agreements is not a surprise: the Bureau has said for months that it was developing such a rule.

This post examines the details of the proposal—how it would regulate arbitration, its scope, and its effective date. We also discuss the course of the rulemaking process, including potential judicial review of any final rule. In a future post, we’ll evaluate the CFPB’s purported justifications for the regulation.

The bottom line: The CFPB’s proposal is effectively a blanket ban on the use of arbitration by companies in the consumer financial services arena. It is an attempt to overrule by regulation the Supreme Court’s landmark decision five years ago in AT&T Mobility LLC v. Concepcion (in which we represented AT&T). Businesses that are concerned about the ramifications of this proposal will have 90 days from the date the proposal is published in the Federal Register to submit comments to the agency, and if a rule is adopted in the present form of the proposal, parties are certain to seek judicial review.Continue Reading The CFPB’s Proposed Anti-Arbitration Rule

The day after we released our study (pdf) of class action litigation, the Consumer Financial Protection Bureau issued some preliminary results in connection with its study of arbitration under the Dodd-Frank Act. (That statute gives the CFPB power to regulate or prohibit the use of arbitration agreements by the businesses it oversees, but requires the Bureau first to conduct a study of arbitration agreements.)

The agency repeatedly describes the information that it reports as “preliminary” and subject to further review and revision, and states that the subjects covered are those as to which it has been able to gather information—and
Continue Reading CFPB Has Much More Work To Do On Arbitration Study

We’ve been reporting on the constitutional challenge to President Obama’s recess appointments to the National Labor Relations Board, which has serious implications for the recess appointment of Consumer Financial Protection Bureau head Richard Cordray. Yesterday, the Supreme Court granted the government’s unopposed petition for a writ of certiorari from the D.C. Circuit’s decision in Noel Canning v. NLRB.

The Court granted review of three questions:

  • Whether the President’s recess-appointment power may be exercised during a recess that occurs within a session of the Senate, or is instead limited to recesses that occur between enumerated sessions of the Senate.
  • Whether


Continue Reading Supreme Court Grants Review in Recess Appointments Challenge

We’ve blogged about the D.C. Circuit’s ruling in Noel Canning v. NLRB (pdf) that President Obama’s three 2012 recess appointments to the National Labor Relations Board are unconstitutional. The consequence of that decision was to invalidate the NLRB decision against Noel Canning for lack of a quorum of NLRB members. The decision also cast a dark cloud over many other NLRB decisions, as well as the recess appointment of Consumer Financial Protection Bureau head Richard Cordray.

As we mentioned, the Solicitor General already filed a petition for certiorari in Noel Canning. The National Chamber Litigation Center has just filed
Continue Reading US Chamber of Commerce Takes Up Recess Appointments Fight in Supreme Court

We’ve previously written about the D.C. Circuit’s decision in Noel Canning v. NLRB, which held that President Obama’s three recess appointments in 2012 to the National Labor Relations Board (NLRB) are unconstitutional. The Solicitor General has just filed a petition for certiorari, asking the Supreme Court to review the D.C. Circuit’s decision.

The Obama administration’s decision to seek Supreme Court in Noel Canning is unsurprising. By invalidating the recess appointments to the NLRB, the D.C. Circuit’s decision undermines every action by the NLRB since those appointments were made on January 4, 2012. The decision also casts a dark
Continue Reading U.S. Seeks Supreme Court Review of Noel Canning v. NLRB in an Effort to Rehabilitate Recess Appointments to NLRB (and CFPB)

On January 25, 2013, the D.C. Circuit held in Noel Canning v. NLRB (pdf) that President Obama’s three recess appointments last year to the NLRB are unconstitutional.  The decision casts a shadow over every action taken by the NLRB since those appointments were made on January 4, 2012.  Moreover, because Richard Cordray received a recess appointment to head the Consumer Financial Protection Bureau (CFPB) on the same day, the DC Circuit’s decision provides grounds for challenging certain CFPB actions.  Please see our report on the DC Circuit’s decision and the implications for challenges by companies to agency actions.
Continue Reading DC Circuit Invalidates NLRB Recess Appointments, Undermining Many NLRB and Consumer Financial Protection Bureau Decisions