Consumers had good reason to celebrate Monday after the Consumer Financial Protection Bureau, after years of preparation, issued a rule blocking credit card companies, banks and other financial firms from putting roadblocks in the way of customers joining class-action lawsuits. It's a big deal.
But the party won't last.
It's all but certain that Republican lawmakers in control of the House and Senate will move quickly to overturn the rule as part of their ongoing efforts to cripple the consumer-watchdog agency and create a more business-friendly regulatory landscape.
Because God forbid consumers actually have the power to hold big companies accountable for unfair or unethical practices.
The CFPB was authorized by the 2010 law that created the bureau, the Dodd-Frank Wall Street Reform and Consumer Protection Act, to study use of arbitration clauses related to financial products and services.
Those are the provisions in terms of service that typically require all disputes to be settled through arbitration and prevent consumers from filing lawsuits or banding together in class actions.
Dodd-Frank says the CFPB "may prohibit or impose conditions or limitations on the use" of arbitration clauses if it determines that restricting such provisions "is in the public interest and for the protection of consumers."
On Monday, the bureau did just that.
"Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," CFPB Director Richard Cordray said in a statement.
"These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up," he said. "Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together."
Christine Hines, legislative director for the National Assn. of Consumer Advocates, told me the CFPB isn't thumbing its nose at Republican lawmakers who have insisted for years that the agency is a rabid regulatory pit bull in need of either a very short leash or a trip to a farm.
"The agency has to continue doing its job," she said, "even though there are very anti-consumer people in power."
Other consumer advocates echoed that sentiment.
"The rule will help to combat the culture of companies profiting from charging illegal fees and committing other crimes against their customers," said Rohit Chopra, senior fellow at the Consumer Federation of America.
Said Lisa Donner, executive director of Americans for Financial Reform: "The consumer agency's rule will stop Wall Street and predatory lenders from ripping people off with impunity, and make markets fairer and safer for ordinary Americans."
All true. But that means Republican lawmakers, who have drafted bills to water down the CFPB's authority as well as to kill the bureau outright, would need to roll over and allow the rule to be enacted throughout the financial-services industry. That's hard to imagine.
Republicans' most sweeping rollback of Dodd-Frank is the nearly 600-page Financial Choice Act, written by Texas' Jeb Hensarling, Republican chairman of the powerful House Financial Services Committee. Buried on Page 415 is this incredibly sneaky provision:
"Section 1028 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5518) is hereby repealed."
That's all it says. No description of what Section 1028 may be. No explanation as to why it should be repealed.
As you've undoubtedly guessed, Section 1028 is where the CFPB's power to restrict arbitration clauses lives. The Financial Choice Act explicitly strips the bureau of its related rulemaking power.
Ah, but the rule's now out there. So what can Republicans do about that?
Enter, stage right, the Congressional Review Act, a previously little-known law that conservative lawmakers have been using to undo more than a dozen regulations implemented in the closing months of the Obama administration. It allows Congress to throw out any federal regulation issued within the last 60 days.
Consumer advocates — who for months have been gearing up for this fight — tell me they have little doubt the House will swiftly use the Congressional Review Act to undermine the CFPB's arbitration rule. Then the matter goes to the Senate, and that's where advocates hope they can mount their defense.
I'm hearing that all roads lead to Sen. Lindsey Graham (R-S.C.), who introduced a bill in 2015 aimed at giving military service members the right to opt out of mandatory arbitration and have their day in court if they believe they were treated unfairly in foreclosure proceedings or other issues involving repossession of property.
I called and emailed Graham's office Monday. No one responded.
My hunch is that Graham and other Republicans who may be waffling on healthcare won't also pick a fight on arbitration. They may feel that crushing the CFPB's new rule will help Senate Leader Mitch McConnell save face after the bruising healthcare battle.
Business interests certainly can make the case the class actions are abused by unscrupulous lawyers eager for a fat stack of settlement cash. But such lawsuits also may be the only way consumers can be compensated for relatively small ripoffs — a dubious $5 fee here, a questionable "convenience charge" there.
No one would individually litigate, let alone arbitrate, such petty grievances. Class actions allow people to stand up for themselves.
"Large corporations have turned fine-print clauses buried deep in their contracts into a license to steal from American consumers and cover up the evidence," said Lisa Gilbert, vice president of legislative affairs for Public Citizen.
"The CFPB rule will right this egregious wrong by restoring consumers' ability to enforce their most basic rights and protections in court."
For a while anyhow.