"President Trump named John R. Bolton, a hard-line former American ambassador to the United Nations, as his third national security adviser on Thursday, continuing a shake-up that creates one of the most hawkish national security teams of any White House in recent history. Mr. Bolton will replace Lt. Gen. H. R. McMaster, the battle-tested Army officer who was tapped last year to stabilize a turbulent foreign policy operation but who never developed a comfortable relationship with the president." Bolton was an outspoken advocate of military action during the George W. Bush administration, and has "called for action against Iran and North Korea."
A controversial rule banning financial institutions from forcing consumers into arbitration agreements is the subject of a looming Capitol Hill fight—the latest salvo in Republicans’ long war against the Consumer Financial Protection Bureau.
The CFPB, which key Republicans and financial industry players have opposed since its founding in 2011, finalized a long-awaited rule on July 10 that prohibits banks from inserting mandatory arbitration clauses into contracts for financial products like bank accounts and credit cards. By signing contracts with arbitration clauses, consumers can give up their right to join in class actions against companies, and the new rule could lead to a spike in class-action lawsuits against banks accused of wrongdoing.
Republicans on the House and Senate banking committees have vowed to kill the rule, proposed by the CFPB in 2016. Sen. Tom Cotton, a member of the Senate Banking Committee, is set to unveil a resolution scrapping the rule soon, while Rep. Jeb Hensarling, chairman of the House Financial Services Committee, said he will roll out his version quickly as well. Both efforts would use the Congressional Review Act, which allows Congress to repeal regulations finalized within a particular time frame. GOP lawmakers have used the act extensively this year to roll back rules finalized in the waning days of the Obama administration.
The move could test Republicans’ resolve to defend Wall Street amid a rancorous political atmosphere inside the Capitol, just after a months-long battle over legislation to repeal Obamacare that carried much of the same political overtones, in which Democrats portrayed the GOP as favoring the wealthy over average Americans.
The resolution is likely to pass the House, but it may set up a battle between business groups and consumer advocates looking to pick off undecided members in the Senate, where the vote math could be much narrower.
“The Senate is always a tougher nut to crack than the House on issues like these,” said Matt Webb, senior vice president of legal reform policy at the U.S. Chamber of Commerce’s Institute for Legal Reform, which backs the GOP effort.
Consumer groups say the Senate could be the key to victory as well.
“Our targets are any senator who wants to look at a Wells Fargo customer in the face,” said Amanda Werner, a campaign manager for Americans for Financial Reform and Public Citizen.
For Werner, Wells Fargo isn’t an arbitrary example. The San Francisco-based bank has been embroiled in scandal since it was accused of opening hundreds of thousands of credit-card and bank accounts without customers’ consent. Wells Fargo was hammered with lawsuits from customers, but in several cases the bank has successfully argued that because of language in its contracts, customers must move to private arbitration instead, Werner said.
Werner said Public Citizen is leading the effort to preserve the new rule, but other consumer groups are also involved, including the National Consumer Law Center and the National Association of Consumer Advocates.
The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act gives the CFPB the authority to restrict mandatory arbitration clauses, and the new rule represents a cornerstone of the five-year-old agency’s mission.
The CFPB operates as an independent agency, much like the Securities and Exchange Commission and the Commodity Futures Trading Commission, which means that the president’s authority over it is limited. That independence has led to criticism from some Republicans that the CFPB and its current director, Richard Cordray, have run amok.
“The CFPB has gone rogue again, abusing its power in a particularly harmful way,” Cotton said in a July 11 statement.
Webb said the rule would do little for consumers and is a boon to trial lawyers.
“For the most part, most consumer complaints with financial services industries are issues that are very specific to the individual consumer and wouldn’t be subject to class-action treatment,” Webb said.
The Chamber and other industry groups are backing a repeal, and they’ve got powerful backers in Congress. A spokeswoman for Cotton said the Arkansas Republican has drafted a resolution repealing the rule and is preparing to advance the measure. Hensarling, a longtime foe of the CFPB, hasn’t announced a House version, but has said he will move on the issue quickly.
“We’re going to do it so fast it will make your head spin,” Hensarling said on the Hugh Hewitt radio show on July 12.
Action is likely to come soon. Under the CRA, Congress has a window of 60 legislative days to repeal a rule after it has been finalized.
A CRA resolution needs only a simple majority to pass in both chambers. A firm Republican majority in the House means it’s likely to pass there. In a party-line vote in June, lawmakers passed legislation introduced by Hensarling that would scale back CFPB authority and subject the agency to the congressional appropriations process.
But the Senate has yet to take up that bill, known as the Financial Choice Act. Senate Banking Committee Chairman Mike Crapo has said his panel is moving forward with its own, bipartisan legislation overhauling bank regulations.
And the outcome is equally unclear for a Senate repeal of the CFPB arbitration rule.
Two key Republicans are Sens. Lindsey Graham and Lisa Murkowski. Graham introduced legislation in the previous two Congresses that would allow service members to opt out of mandatory arbitration clauses in contracts. Murkowski was a cosponsor on Graham’s 2014 bill, along with several Democrats.
Neither senator has weighed in on the new CFPB rule, and their offices didn’t respond to requests for comment, but if both oppose a resolution to scrap it, supporters of the rule are only one Republican away from stopping the repeal effort in its tracks.
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"When a Russian news agency reached out to George Papadopoulos to request an interview shortly before the 2016 election," deputy communications director Bryan Lanza encouraged him to respond. "You should do it," Lanza wrote in a September 2016 email, "emphasizing the benefits of a U.S. 'partnership with Russia.'" The Trump campaign has "sought to paint the 30-year old energy consultant as a low level volunteer" in the campaign, but recently disclosed emails show that Papadopoulos had contact with "senior campaign figures" in the Trump campaign, "such as chief executive Stephen K. Bannon and adviser Michael Flynn," who encouraged him to "broker ties between Trump and top foreign officials."