Two weeks after the Consumer Financial Protection Bureau announced a rule restoring the right of consumers to bypass arbitration clauses and sue banks in class action lawsuits, House Republicans plan to invoke a special congressional rule this week to block it.

Despite the bureau's authority to make financial regulations, Congress can always nullify any new agency rule within a certain number of days through the Congressional Review Act.

The specific issue involves mandatory arbitration clauses in contracts between consumers and financial institutions. The new CFPB says those clauses, which have been added to millions of consumer contracts over the last decade, can't prevent class actions.

Consumers Union, the policy and mobilization arm of Consumer Reports, sent a letter to Congress today urging members to preserve the new rule.

"Forced arbitration is stacked against consumers and shields financial companies from being held accountable for breaking the law and mistreating their customers," said George Slover, senior policy counsel for Consumers Union.

“The CFPB’s new rule restores the rights of consumers who have been treated unfairly to join with others and seek the relief they deserve in court," he said. "Repealing the arbitration rule would keep this traditional legal pathway blocked, protecting banks and lenders at the expense of consumers.”

Supporters of the bureau—under fire by the Trump administration—worry Congress might use its power over time to shoot down any new rule created by the CFPB, effectively gutting its authority.

Other rules at risk include:   

Protections for prepaid card users. The prepaid card rule requires that issuers make the fees on these cards more transparent so that consumers aren’t hit with unexpected charges. It also puts in place protections that limit liability for consumers in cases of unauthorized transactions or fraud. And it places limits on overdraft fees on the very few prepaid card brands that actually let consumers spend more money than they have loaded onto the card. The CFPB is currently taking public comments on updates to the rule, which is to take effect in April 2018. Congress failed to kill the original rule using the Congressional Review Act, but could try again on the updated rule.

Help for consumers harassed by debt collectors. A common complaint about debt collectors is that they bother people over debts that are either no longer owed or weren’t owed in the first place. So the CFPB and the Federal Trade Commission are considering rules to protect consumers from unwanted calls. The CFPB's proposals would require collectors to provide consumers with more information about their supposed debt and how to dispute it, and make sure collectors are connecting the right debt to the right person. The rule would also make it easier for consumers to dispute their debt.

New rules for those burdened by payday loans. The CFPB has proposed rules intended to prevent borrowers using payday loans from falling into a costly debt trap that can leave them worse off than if they hadn’t borrowed money in the first place. This happens because payday loans charge high interest rates, and as the interest adds up, it becomes more difficult for borrowers to make payments. 

Outlook for the CFPB

House leadership says it could vote as soon as Tuesday to block the arbitration rule, so it would have "no force or effect."

And last week, Republican Senators announced their intent to nullify the rule. Sen. Tom Cotton, R-Ark., and others say they want to block the rule because of the costs of defending frivolous lawsuits.

"We should be encouraging job creation and lowering consumer costs, not stifling economic growth with needless, endless litigation,” says Cotton.

The bureau, created in the Obama era in response to the nation's housing meltdown and Great Recession, has come under fire as too powerful. 

Over the past six years, the bureau has returned nearly $12 billion to wronged consumers, mainly through enforcement actions, and has supported many individuals with complaints about individual companies.

Richard Cordray, the CFPB's director, is scheduled to finish his five-year term next July. A new director, appointed by President Donald Trump, could take the bureau in a different direction, or put the brakes on many of the CFPB's current activities, notes Joe Rubin, senior counsel at Arnall Goldman Gregory, a Washington, D.C., law firm that represents financial institutions before the CFPB.

A pending court decision on the constitutionality of the CFPB's structure, could end Cordray's tenure prematurely. If all or parts of a wide-ranging financial bill passed by the House in June were to become law, it would significantly defang the bureau's activities. And Cordray could on his own decide to leave early to run for governor of Ohio, where he was state attorney general before coming to Washington.

What You Can Do Now

Assuming its rules don't get pushed back by Congress, the bureau can continue to enforce current consumer protection rules. It can still move forward in its research of consumer financial products markets to identify trends and potential problems. It also can levy fines on companies that engage in unfair, deceptive, or abusive practices.

And consumers can take advantage of the CFPB's wealth of information and resources in the following ways:

• Educate yourself before buying a house. The CFPB has numerous tools and worksheets to help home buyers compare loans, understand lenders' cost estimates, and comprehend closing documents.

• Get the best terms on auto loans. A shopping sheet puts loan terms side by side so that you can see which deal is better. 

• Analyze college aid offers. Prospective students can use the CFPB's financial aid shopping sheet to compare aid packages.

• Read the complaints others file about financial institutions. The CFPB's Consumer Complaint Database is open for public view, so you can read what other consumers have to say about the financial companies that you use.

• Make a complaint against a financial company yourself. You can register your gripe in the complaint database. Companies typically will get back to you within 15 days.

Randy Stankowitz of Phoenix, Ariz., says that his mortgage lender refused to stop charging him for private mortgage insurance, which lenders make you buy if you can’t put down at least 20 percent when you purchase a home. The charges kept coming even after he repeatedly proved his home equity had risen enough that he should no longer have to pay it. After he posted his complaint in the CFPB's Consumer Complaint Database, the bureau contacted the lender and the charges stopped. "I was just elated with those people," he says of the CFPB. According to Stankowitz, after the complaint was registered,  the company took care of his matter right away.