For consumer advocates, Tuesday's late-night Senate vote to overturn the so-called arbitration rule is only a battle lost, not an end to the fight.
Republicans in the upper chamber voted to kill the rule, which would have banned banks, credit card companies and other financial firms from requiring customers to settle disagreements through arbitration rather than in the courts. The mandate, which makes it impossible for consumers to band together in class-action lawsuits, often appears in the fine print in customer agreements.
The repeal comes despite the recent uproar over the inclusion of a mandatory arbitration clause by Equifax in its free-monitoring service agreement. In that case, the credit-reporting firm — which offered the service after revealing a massive data breach in early September — ended up removing the language.
"When people are cheated, they believe they have the right to go to court," said Paul Bland, executive director of Public Justice. "The next time something like Equifax happens, those Senators are going to have to own this."
If the regulation had been in effect when Equifax offered the service, the company would have been banned from using forced arbitration because credit-reporting companies were covered by the rule.
The measure would have pertained to customer agreements as of March 18, 2018. Already, similar clauses are prohibited in mortgage contracts.
Bland said his group will continue efforts to give consumers the right to their day in court for all agreements with financial institutions.
"If we don't go away and we keep telling the stories of real people who have been harmed by overreaching lenders, I think we can turn this around," he said.
Republicans' move to kill the rule came despite polls showing that a majority of Americans support it. For example, a survey done earlier this month by the American Future Fund showed that 67 percent of respondents favored preserving the rule. Broken down by party affiliation, 64 percent of Republicans, 73 percent of Democrats and 67 percent of independents supported it.
Opposition came largely from the banking industry, pitting it against consumer advocacy groups, veterans groups and Democratic lawmakers, among others. Even some conservative organizations, which typically support Republican-sponsored legislation, opposed the effort to dismantle it on the grounds that doing so takes away individual rights.
Yet in a political environment where Republicans have been able to make little headway on their agenda despite controlling both the House and Senate — i.e., failing to repeal Obamacare — this move offered a chance to prove to supporters that they can get legislation passed, Bland said.
"In the long run, though, this won't be good news," Bland said. "They voted on it at 10 o'clock at night when no one was paying attention. It was just a huge giveaway to large banks."
The banking industry, however, called the congressional vote a "win for consumers."
"As we and others have made clear, the rule was always going to harm consumers and not help them," said Rob Nichols, president and CEO of the American Bankers Association, in a statement.
The industry's opposition rests largely on the argument that most of the money spent on class-action litigation ends up in the pockets of trial lawyers instead of consumers.
A Treasury Department report released Monday said the rule would impose more than $500 million in additional legal defense fees on lenders and transfer $300 million to plaintiff's lawyers.
Congressional Republicans have had a bull's eye on the arbitration rule since the Consumer Financial Protection Bureau issued it July 10. The Republican-dominated House approved the resolution to overturn it on July 25. Since then, it idled in the Senate Banking Committee while Republican leaders sought to shore up support for the measure.
The repeal effort was in play due to the Congressional Review Act, which gives lawmakers 60 legislative days to overturn a new federal rule by resolution.
"We passed this resolution to protect consumers from wrongdoing, while avoiding frivolous lawsuits that will drive up costs for the millions of Americans who carry a credit card," said Senate Majority Leader Mitch McConnell, R-Kentucky, in a statement.
Next, the resolution goes to President Trump, who is expected to sign it.
Meanwhile, although consumers should read agreements with banks carefully for a possible opt-out option from mandatory arbitration, there's a good chance they won't find it.
"There are a lot of products where people don't have any choice," Bland said.