The Senate passed a bill Tuesday to kill a regulation from the Consumer Financial Protection Bureau.

The rule would have prevented financial institutions from including forced-arbitration language in contracts for things like credit cards and car loans.

Democrats argued that the rule protected consumers and gave them more legal recourse against big banks. Republicans argued that lawsuits were not beneficial to consumers and could hurt small banks.

On Tuesday, Congress passed a bill preventing an Obama-era regulation from taking effect that would have made it easier for consumers to file class-action lawsuits against financial firms, particularly banks.

The bill rescinded a rule from the Consumer Financial Protection Bureau that would strip language from certain financial agreements forcing consumers to settle grievances in arbitration instead of with a lawsuit.

Vice President Mike Pence needed to cast the tiebreaking vote passing the bill since Republican Sens. Lindsey Graham and John Kennedy voted against it.

The bill was the culmination of a long fight between Democrats and Republicans, with each side arguing that it was fighting in the interest of consumers.

What was the rule?

The rule, released in July by the CFPB, prevented financial institutions from including clauses in contracts for financial products that forced consumers into arbitration in the event of dissatisfaction with the product. Arbitration cases are resolved privately by an arbiter.

While the rule did not do away with arbitration, it would have guaranteed consumers the option to settle disputes with lawsuits.

Forced-arbitration clauses are common in contracts for things like credit cards and car loans, and banks argue that it is a quick way to settle consumers' disputes without going through drawn-out legal cases.

The CFPB's rules, however, are subject to the Congressional Review Act, which allows Congress to void any rule with a majority vote. So nearly as soon as the regulation on arbitration was released, the wheels to remove it began to turn.

Arguments for and against the bill

Democrats' argument in favor of the CFPB rule was pretty simple: They said it allowed consumers to hold banks and financial institutions accountable. The CFPB said class-action lawsuits brought more money back to consumers who had been wronged and arbitration clauses let banks off the hook.

Additionally, Democrats argued that the rule was in part about consumer freedom, giving them the option of going to court instead of being forced into arbitration.

"This rule helped ensure that consumers are not forced to forfeit their rights in settling disputes with big banks and other financial firms and served as a powerful tool for consumers to hold financial institutions accountable," Democratic Sen. Maggie Hassan said in a statement following the vote.

On the other side, Republicans argued that class-action lawsuits did not benefit consumers and could harm businesses.

A Treasury report argued that plaintiffs in class-action lawsuits were no better off than they were under forced arbitration. There was debate over the numbers in the Treasury report, but the GOP pointed to it as evidence that arbitration worked for consumers and argued that lawsuits were beneficial only to lawyers.

"Now, arbitration is a widely accepted method of resolving disputes between consumers and banks and other financial institutions," GOP Sen. John Cornyn said on Tuesday. "And it actually increases the benefit that flows to the consumer, as opposed to the alternative, which is class-action lawsuits, which enriches lawyers where consumers get pennies on the dollar."

Additionally, Republicans argued that the rule would leave smaller community banks open to harmful, frivolous lawsuits.

"Further, the rule would harm our community banks and credit unions by opening the door to frivolous lawsuits by special-interest trial lawyers," a statement from the White House said.

The politics of the bill

The issue became particularly heated after the recent Wells Fargo and Equifax scandals.

In Wells Fargo's case, it emerged after the bank's fake-accounts scandal that the bank had included language that forced consumers into arbitration. And Equifax was found to have created a website that pushed people toward arbitration rather than lawsuits following that company's massive data breach.

Democrats used these two examples as evidence of why the rule was needed and decried the passage of the bill killing the rule. One particularly strong voice was that of Sen. Elizabeth Warren, who has opposed Wall Street for years and campaigned against the bill.

"The American people have watched as Wells Fargo cheated its customers and then used arbitration clauses to try and escape liability," Warren said Tuesday. "They've watched as Equifax negligently allowed hackers to steal the personal financial information of more than half of all American adults, and then use arbitration clauses to try and escape accountability. Politicians have watched it too. And while many of their eyes might be blinded by dollar signs, it may not be enough."

On the other side, Republicans have long been critical of the CFPB and particularly its director, Richard Cordray. The animosity toward Cordray and the CFPB, along with the Treasury report, most likely pushed on-the-fence GOP members toward supporting the bill.

While some Democrats and Cordray called on President Donald Trump to veto the bill, it is highly unlikely he would do so considering the administration applauded its passage in a statement released Tuesday.

"By repealing this rule, Congress is standing up for everyday consumers and community banks and credit unions instead of the trial lawyers, who would have benefited the most from the CFPB's uninformed and ineffective policy," the statement said.