WASHINGTON (Reuters) – President Donald Trump signed a Congressional resolution on Wednesday that lets banks block customers from filing class action lawsuits, partly delivering on his election campaign promise to lighten U.S. financial regulation.
The White House confirmed Trump signed the resolution, which kills a Consumer Financial Protection Bureau (CFPB) rule released in July, despite heavy lobbying for a veto by the president.
The rule, set to go into effect next spring, gave bank customers the option to band together in lawsuits known as class actions to lower their legal costs, but Republicans say the suits only benefit attorneys who reap large fees. They also argue arbitration is faster and leads to larger awards. Democrats say arbitration is rigged against customers and the U.S. constitution guarantees a right to a trial.