The Senate voted late Wednesday night to strike a federal rule that would have allowed consumers affected by the Equifax hack to sue the company. Without it, the millions affected by the historic security breach may be disallowed from related joining class action lawsuits. This specific rule, and only this rule, would be nullified if the joint resolution is signed by the President.
The vote was 50/50, with the tie-breaking aye cast by Vice President Pence.
The rule in question was entered into the Federal Register by the Bureau of Consumer Financial Protection in July; it prevents financial companies that bind their users by arbitration agreements from prohibiting those same users from suing as a class.
The final rule prohibits covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.
That's exactly like what the terms of Equifax's services included when users went to the company's site to see if they were affected by the hack. Although the site in question appears to have been essentially useless, it shunted users into an Equifax-provided service with terms that bound disputes to be resolved via arbitration.
Equifax later modified some of its terms to remove the arbitration clause, and also indicated in its TrustedID service FAQ that the clause "applies to the free credit file monitoring and identity theft protection products, and not the cybersecurity incident."
Nevertheless, it's very unclear just what users may or may not have signed up for, and to what degree Equifax is protected by these terms. Arbitration agreements have been effective before in preventing class action lawsuits. The BCFP rule was made to prevent major incidents like this one from having their legal repercussions partly nullified;
H.J. Res. 111 was introduced on July 20, the day after the rule above was instituted. Its entire purpose is to disapprove of that specific rule.
It passed the House on July 25 231-190, split right down party lines except for one defecting Republican who voted nay with the Democrats. In the Senate, it was split 50/50, with two Republicans — Louisiana's John Neely Kennedy and South Carolina's Lindsay Graham — joining the Democrats with nays. The VP broke the tie and the Joint Resolution passed shortly before 10PM Eastern time. The Monopoly Man was not present.
It's not entirely clear what effect, if any, this would have on the Equifax situation specifically, since the company has voluntarily limited the scope of its arbitration terms, although clearly it is a serious blow to consumer protections at large.
- This article originally appeared on TechCrunch.