Service member and veterans groups on Wednesday criticized a Republican effort to overturn the Consumer Financial Protection Bureau’s rule barring mandatory arbitration in many consumer contracts. 

The groups joined Sen. Jack Reed, D-R.I., ranking member of the Senate Armed Services Committee and a member of the Senate Banking Committee, to oppose Senate Republicans’ plan to pass a measure that would repeal the CFPB rule. The rule took effect Monday, but the agency is giving companies until March 2018 to comply.

“Our membership has stated unequivocally that we will not accept a future where our military veterans’ financial protections are chipped away to increase the margins of the financial sector,” said John Kamin, assistant director of the American Legion’s Veterans Employment & Education Division. The American Legion opposes the repeal effort, he said.

Republicans are trying to repeal the CFPB rule under the Congressional Review Act. The House voted 231-190 on July 25 to pass a repeal measure. The White House has said the president would sign the repeal measure. 

The CFPB rule bars consumer contracts with banks, cell phone companies and others from including clauses that waive a consumer’s right to join class-action suits, instead offering arbitration as the only option to settle disputes other than individual litigation. Proponents say the rule will expand the legal rights of consumers. Opponents say it will mainly serve to enrich class-action lawyers.

“The rule is extremely important to people,” Reed said. “That’s been highlighted by the Equifax breach, it’s been highlighted by some of the disputes regarding Wells Fargo.”

Under the CRA, the Senate can repeal the rule with a simple majority. No Democrats are expected to back it. But the Senate has to act within 60 legislative days of the rule’s July 19 publication. The House passed the repeal over the opposition of all Democrats and one Republican. The Senate parliamentarian will determine when that clock runs out, a staffer said.

Service members on active duty are already more protected than many consumers. Two existing laws prohibit arbitration agreements — and cap interest rates on loans — for some products. But the groups said Wednesday that companies have found ways around the laws.

John McElligott, co-chairman of the Guard and Reserve Committee of The Military Coalition, said some members of the military are being held during deployment to clauses in contracts signed before they joined the military. The coalition’s 32 members include the Veterans of Foreign Wars and associations representing the Navy, Army, Air Force and Marines. 

“Unfortunately, companies have found a way around these laws,” McElligott said. “They routinely bury forced arbitration clauses in the fine print of their contracts.”

Current and former service members were among those that Wells Fargo signed up for unauthorized accounts, he said. A practice that led to $185 million in fines last year and the CEO explaining the actions before Congressional committees. The bank established 3.5 million accounts unauthorized by customers.

The rule “must be supported, protected and fully enforced,” he said.

McElligott said that active duty service members are also more vulnerable to identity theft than civilians. The report this month that as many as 143 million Americans had personal information stolen in a breach at the credit-reporting firm Equifax is particularly troubling, he said.

Equifax has mandatory arbitration clauses in its contracts, though it said arbitration clauses would not be part of the free services customers can receive to deal with the effects of the breach.

The arbitration rule is the result of an “unholy alliance” between Democrats and trial attorneys, House Financial Services Chairman Jeb Hensarling said in the House debate on the repeal measure. If the rule goes into effect, consumers’ main avenue for redress will be through class-action suits, which would benefit trial lawyers, the Texas Republican said.

A CFPB study of four years of class-action lawsuits in financial services disputes found that out of $2.7 billion in awards to consumers, $424 million in fees went to attorneys. The study also found consumers rarely went to arbitration because most of their disputes with banks and other providers were over amounts far smaller than the cost of arbitration.