Republicans need a simple majority in the Senate to successfully repeal a Consumer Financial Protection Bureau rule on arbitration, but the reported defection of one GOP senator means the effort could be in danger of failing.
Sen. Lindsey Graham, R-S.C., told The Wall Street Journal that he opposes the GOP resolution to repeal the CFPB's rule banning financial companies from using forced arbitration clauses in its products. Graham told the Journal that allowing consumers to bring class action lawsuits would make banks and credit card companies "think twice" about "nickel-and-diming consumers."
Through the Congressional Review Act, Congress can jointly "disapprove" a regulatory rule and repeal it if the White House also agrees. The House has already passed its own disapproval resolution and the White House has said it would sign it if sent to the president's desk.
All eyes are now on the Senate, which is expected to take up the issue when the chamber returns from recess in September.
If Graham follows through on his commitment to oppose the rule, Senate Republicans would only have room for one more GOP defection to pass the rule, assuming all Democrats and Independents vote against the repeal resolution. The Journal reported that GOP Sens. Susan Collins of Maine, Lisa Murkowski of Alaska and John Kennedy of Louisiana are undecided on the rule. Sen. John McCain, R-Ariz., may be unable to vote if he takes leave for brain cancer treatment.
Isaac Boltansky, analyst at Compass Point Research & Trading, said in an Aug. 1 memo that the likelihood of the GOP succeeding in its repeal is "no longer probable."
The Senate recently failed to repeal the CFPB's rule requiring credit card-like protections and account information for prepaid products.