A few months back, the Consumer Financial Protection Bureau proposed new rules that would limit how banks, credit card companies, and other financial services could shield themselves from legitimate lawsuits by forcing customers to sign away their constitutional rights. Now, the House of Representatives has passed an appropriations bill that, if signed, would stop the CFPB from enforcing these rules and give banks back their “get out of jail free” cards.

A growing number of companies — from banks to cable companies to for-profit colleges — have adopted the practice of inserting arbitration clauses into their customer contracts. These clauses, which most customers have no authority to change or remove, generally do two things: bar the consumer from suing the company in a court of law, and prohibit that consumer from joining similarly harmed customers in a class action.

Instead, each individual complaint must be heard in the byzantine process of binding arbitration, where damages are limited, costs for mounting a proper case can be prohibitive, no precedents are set, and where the arbitrator’s final decision can not be appealed in the legal system — even in cases where a serious error was made that would have resulted in a different outcome.

As a result, very few wronged consumers take part in the arbitration process. Additionally, the CFPB found that financial institutions primarily use arbitration as a tool for shutting down class actions, invoking their contractual right to arbitration mostly in cases that involve large numbers of plaintiff customers.

To that end, the CFPB proposed that certain financial services providers be barred from banning class actions in their consumer contracts.

But in the House version of the 2017 Financial Services and General Government Appropriations Act, the Bureau would effectively be stopped from moving forward with its proposed rules. This legislation passed through the House easily on Thursday, with a 239-185 vote, largely along party lines.

Among the many anti-consumer things sprinkled throughout the appropriations bill — we’ll get to those in a later story — is a condition barring the CFPB from using any of its funding “to regulate pre-dispute arbitration agreements.” Additionally, any regulation the Bureau does come up with can’t be enforced until the CFPB effectively repeats its three-year study on the issue.

This is, in essence, a repeat of what the banks asked Congress to do last year with riders to the omnibus spending bill, but which ultimately failed to make the final cut.

And just like last year — and several other previous pieces of failed legislation — the House is trying to restructure the CFPB to weaken the agency and put it under the budgetary thumb of bank-backed lawmakers.

Rather than have the Bureau be led by a single Director, the appropriations bill seeks to replace that position with a 5-person board, any member of which can be removed by a sitting President at any given time for “inefficiency, neglect of duty, or malfeasance in office.”

Instead of having the CFPB’s funding coming from the Federal Reserve, the Bureau would need to enter into the annual political process of seeking appropriations from Congress.

“In last night’s vote, Wall Street interests prevailed over the interests and rights of American consumers,” says Christine Hines, legislative director for the National Association of Consumer Advocates. “Congress can and should fund the government without indulging corporate interests and their harmful policies.”

The funding bill now goes to the Senate, where it is expected to face greater scrutiny from both lawmakers and consumer advocates.

As the CFPB finalizes its rule, industry lobbyists have tried to spread myths about the benefits of arbitration and the shortcomings of class actions.

One favorite factoid repeated by arbitration backers is that the average class-action settlement only pays out $35/plaintiff. That may be accurate, but it ignores a number of important aspects of class action lawsuits.

First, those $35 payments add up. If 200,000 customers are affected, that means the company is being penalized $7 million — and that’s not including the substantial chunk of money that would go to the lawfirm(s) representing the plaintiff class.

By comparison, assume (generously) that maybe 200 of those wronged customers goes through the arbitration process. Assume again (even more generously) that each of them subsequently wins and gets damages that are 100 times what they would have gotten through the class action settlement. That’s $3,500 each, for a total of $700,000.

In reality, the number of customers who would even think to go to arbitration would be a lot smaller than this example. According to CFPB data, only 2% of credit card customers would even consider consulting a lawyer for a small-dollar legal dispute.

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