Trump signs repeal of rule that would’ve allowed class-action suits against banks
President Trump on Wednesday signed the repeal of a banking rule that would have made it easier for people file class-action lawsuits against their bank or credit card company.
The rule would have continued to let banks and other financial firms use contract agreements to block consumer lawsuits and require that disputes be settled in private arbitration. But it would have made a key exception: Financial firms would not have been able to use those agreements to block class-action lawsuits.
The Republican-led Senate narrowly voted to repeal the regulation from the Consumer Financial Protection Bureau, which the banking industry had been seeking to roll back.
The Trump administration and Republicans have pushed to undo regulations they say harm the free market and lead to frivolous lawsuits.
Democrats say the rule would have given consumers more leverage to stop companies from financial wrongdoing.
CFPB Director Richard Cordray, an appointee of former President Obama, has called the move a “giant setback” for consumers. He directly appealed to Trump this week to let the rule stand.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.