Banks have a challenge when Congress returns from summer recessnext week. His name is John Neely Kennedy.

The freshman Republican senator from Louisiana is one of ahandful of lawmakers who could squash the finance industry's dreamof tweaking a key CFPB regulation. So far, he's not sayingwhether he will or won't.

The new rule would make it easier for customers to sue financialinstitutions, and banks have spent millions to keep arbitration asthe required venue for dispute resolution instead. Lawmakers have alimited window of time to change the provision, and because theGOP's Senate majority is slim, Kennedy, a lawyer and formerDemocrat who pitches himself as a folksy Washington outsider, couldbe the one to cast the deciding vote.

“Senator Kennedy's vote is very significant,” said Bill Himpler,executive vice president of the American Financial ServicesAssociation, which lobbies for consumer-finance companies. “We'redoing everything we can to let Senator Kennedy know how importantarbitration is for a lot of companies in the great state ofLouisiana.”

Capitol Hill Mystery

Kennedy, 65, is a mystery to many on Capitol Hill. Hisreluctance to get with the GOP program on the arbitration rule hasleft a lot of bank lobbyists scratching their heads. He exemplifiesthe challenges facing the so-called political establishment when itcomes to herding a new wave of mavericks in the unpredictable eraof President Donald Trump.

The CFPB rule restricts financial firms from forcing consumersto resolve their disputes through closed-door arbitration insteadof addressing grievances in open court. Consumer advocates arguethat without it, banks can't be held accountable for cheatingcustomers. Banks hate the rule because it opens them up to costlyclass-action lawsuits. Republican lawmakers say the CFPB used aflawed method to create the rule.

In their attempts to reverse the rule, Republicans are relyingon the Congressional Review Act, which lets lawmakers undoregulations with a simple majority within 60 legislative days oftheir publication. The House of Representatives has already passeda measure reversing the rule. Senators, led by Banking CommitteeChairman Mike Crapo of Idaho, have introduced their ownversion.

Close Vote

Republicans can only afford to lose two votes from their ownparty. And it's going to be close.

Senator Lindsey Graham of South Carolina has already said hedoesn't support overturning the regulation. And it's not clearwhether Arizona's John McCain will be healthy enough to cast a voteas he undergoes treatment for brain cancer. Senators Lisa Murkowskiof Alaska and Maine's Susan Collins are two Republicans who'veexpressed indecision.

That leaves Kennedy, the only Republican on the Senate BankingCommittee who hasn't signed on to the legislation that would killthe CFPB rule or confirmed which way he's going to vote.

“I haven't spent any time on it yet, I haven't really beenbriefed yet,” Kennedy said in a July 24 interview. A spokeswomansaid Tuesday that Kennedy was still mulling it over.

Duck Hunter

A duck-hunting enthusiast and a founder of the North CrossUnited Methodist Church near New Orleans, Kennedy previously ranfor the U.S. Senate twice — once as a Democrat. He switched to theGOP a decade ago. The former law professor served five terms asstate treasurer.

Trump campaigned for Kennedy, helping him win a runoff electionlast year. Kennedy pitched himself to voters as a straight-talkerwith small-government principles.

“I believe in God, I believe in protecting the unborn, I believein more freedom, not more free stuff,” Kennedy said in a campaignad. “I believe that love is the answer, but you ought to own ahandgun just in case.”

Since arriving in Washington, Kennedy has stood out for hiscurious lines of questioning. Once, during a hearing in whichSecretary of Education Betsy DeVos testified, Kennedy suggestedparents should have as many options on where to send their childrento school as they have when they buy mayonnaise at the grocerystore. He was criticized by other lawmakers for comparing a seriousissue to a condiment.

Lining Pockets

Kennedy's unpredictability is an issue just as the lobbying pushon bank arbitration is ramping up.

On one side, bank advocates and Republican Capitol Hill stafferssay that allowing lawsuits would line lawyers' pockets withoutproviding much relief to consumers.

On the other, Democrats and consumer advocates argue thatreversing the rule is a gift to Wall Street, and use the recentsales scandals at Wells Fargo & Co. as an example of why therule is needed. They say arbitration especially hurts veterans andactive military, key constituencies for many GOP lawmakers.

In the middle is Kennedy. Banks question whether his neutralityon the CFPB rule has anything to do with to his ties to attorneys.Kennedy is a former partner at the New Orleans-based law firmChaffe McCall and sits on the Senate Judiciary Committee.

Kennedy's reluctance to choose a side may be an indication he'snot as much of a political novice as Wall Street might think. Afterall, a lot of people who didn't know his name now do.

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