Barr, who is chairman of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy, and Tillis, a longtime member of the Senate Banking Committee, said that a future rulemaking might violate the Congressional Review Act, which Congress invoked when it passed a resolution eliminating the prior iteration of the arbitration rule. The letter is the latest iteration in a brewing battle between bankers, other trade groups and consumer advocates. 

The letter was shared with American Banker. 

"Congress clearly restricted the CFPB's authority to limit use of arbitration when it rejected the agency's prior anti-arbitration rule under the Congressional Review Act," the lawmakers said in their letter to the CFPB, which will be sent on Friday. "As you know, the CRA provides that a rule may not be issued in "substantially the same form" as the disapproved rule unless specifically authorized by a subsequent law." 

At issue is a series of rulemakings by the CFPB relating to forced arbitration. 

A CFPB proposal in January last year would create a nonbank public registry of non-negotiable form contracts that the bureau says "mislead consumers into believing the terms or conditions are legally enforceable." 

While the first arbitration rules would have eliminated mandatory arbitration clauses in a number of financial contracts, which included cell phones, credit cards and checking accounts, the current proposal specifically would address nonbanks that are supervised by the CFPB. 

A group of consumer advocates have urged the CFPB to go further. In September, the CFPB posted a rulemaking petition from Public Citizen, National Consumer Law Center, Americans for Financial Reform, Better Markets and others, urging the bureau to require "meaningful" customer consent regarding arbitration to resolve financial product consumer disputes. They argue in their petition that doing so would not contradict the CRA resolution, and is well within the CFPB's statutory authority. 

"Here, the rule proposed by this petition would not be in 'substantially the same form' as the 2017 rule," the groups said in their petition. "The CFPB's 2017 arbitration rule prohibited class action bans in arbitration clauses and required reporting of certain arbitral records. By contrast, the rule proposed in this petition would not prohibit, or even address, class-action bans. Rather, it would give consumers the right to make the choice about dispute resolution after a dispute arises, thereby ensuring that consumers can make informed, meaningful choices at the most relevant time." 

A long list of financial law professors also wrote to the bureau, arguing that the rulemaking would not violate the CRA resolution. The previous rule "addressed only class action waivers within the world of forced arbitration clauses," the law professors said, and "providers were also required to inform consumers about the prohibition on class action waivers." 

The petition, meanwhile, does not address class action waivers, and would cover individual actions that would not have been addressed in the overturned rule, they said. 

Sen. Elizabeth Warren, D-Mass., led a large group of Democratic lawmakers in December in a letter to Chopra urging him to pursue a rulemaking addressing forced arbitration, and citing the petition. 

Barr and Tillis, however, say that the potential rule is not different enough from the overturned one, and wouldn't satisfy the CRA requirement that any rule overturned by the CRA "may not be reissued in substantially the same form." 

"Congress overturned the prior CFPB rule because it would have effectively invalidated virtually every existing pre-dispute arbitration agreement and because it failed to adequately consider the lack of relief that class actions provide to consumers when compared to far better outcomes provided by arbitration," Barr and Tillis said. 

The new rulemaking, as spelled out in the petition, "would accomplish that very same result directly by invalidating all pre-dispute arbitration agreements in substantially the same form as in the prior rule that the CRA invalidated," they said. 

"Instituting a proceeding to adopt such a rule would be an affront to Congress, and a clear violation of the CRA, and a blatant disregard of fundamental separation-of-powers principles," the pair wrote.