Mike Pence casts the deciding vote in Senate — and now, Wall Street is celebrating

[sharenow]

Vice President Mike Pence stepped into the Capitol Building late Tuesday evening to cast a tie-breaking vote on legislation to block regulation from an Obama-appointed bureaucrat that would have made it easier for lawyers to organize costly class action lawsuits against banks.

The Washington Post reports that the new rule would have cost the banking industry billions of dollars, according to some estimates–a move that would have likely raised credit rates for working class Americans.

Legislation blocking the rule had already been passed in the House before being brought up for a vote in the Senate, where it ultimately passed 51-50. Republican Senators Lindsey Graham (SC) and John Kennedy (LA) broke ranks to join with Democrats, prompting a tie before Vice President Pence was called into cast the deciding vote.

Senate Democrats are lamenting the vote.

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The vote struck down regulation from the Consumer Financial Protection Bureau (CFPB), an agency created under Barack Obama that has a history of finding itself at odds with Republican lawmakers.

If allowed to stand, the CFPB’s rule would have blocked mandatory arbitration clauses in some banks, making it easier for customers to file class action lawsuits against them.

Many major banks include mandatory arbitration clauses in the contracts of their account holders. Such clauses require that disputes between the bank and client be settled by a third-party arbiter rather than in court.

The Vice President’s vote was heralded by financial institutions and businesses, many of whom argue that leaving banks vulnerable to frivolous class action suits incurs billions in lost money–which is then passed onto regular Americans in the form of higher rates.

Indeed a Forbes study found that class action lawyers are the true winners of such cases, making million of dollars for themselves, while the consumers they claim to represent win nearly nothing.

The CFPB rule was challenged in a lawsuit by the US Chamber of Commerce and other pro-business groups last month. Even the Treasury Department took the rare step of condemning the regulation in an 18-page report issued Monday, in which it said the rule “would upend a century of federal policy favoring freedom of contract to provide for low-cost dispute resolution.”

Rob Nichols, president of the American Bankers Association, offered praise for Vice President Pence’s vote: “Today’s vote puts consumers first rather than class-action lawyers.”

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Republican lawmakers saw the vote as a way of curtailing the Obama-era agency. Sen. Mike Crapo (R-Idaho), who sponsored the legislation said “Today’s vote was an important step in asserting Congressional oversight of an agency that has routinely demonstrated a lack of accountability.”

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