Jeb Hensarling

Republicans target arbitration rule for consumers

Republicans are targeting a rule that would let consumers band together to sue their banks or credit card companies rather than use an arbitrator to resolve a dispute.

The Consumer Financial Protection Bureau finalized the rule last week. The rule bans most types of mandatory arbitration clauses. The agency said people who otherwise have to go it alone in resolving a financial dispute should be able to join others in a class-action lawsuit to pursue a remedy to their complaint.

Republicans said Thursday that going that route will increase the costs of borrowing for millions of consumers while enriching trial lawyers who file the lawsuits. They filed legislation that would...