CFPB Director Richard Cordray said the arbitration rule will "stop companies from sidestepping the courts and ensure that people who are harmed together can take action together."

The financial industry was dealt a potentially damaging blow this week when a federal consumer regulator moved on a rule to allow class-action lawsuits against firms. But there are no guarantees the rule will ever go into effect. In fact, one senator is reportedly already moving to roll it back.

Senator Tom Cotton (R-AR) on Tuesday said he has started the process to rescind the Consumer Financial Protection Bureau's new rule, announced on Monday, that would ban companies from using mandatory arbitration clauses that force consumers into arbitration and block them joining together to file a class-action suit. The rule, which has been applauded by Democrats and met with opposition in the business community, could cost financial firms billions of dollars.

"This morning I've started the process of rescinding this rule using the Congressional Review Act," Cotton said in a statement. "The last thing Americans need is more anti-business regulation that will prompt frivolous lawsuits while hurting consumers."

The Congressional Review Act (CRA) gives Congress the ability to nullify agency regulations with a simple majority to scrap recently-made rules. Republicans have already used the CRA to roll back about a dozen Obama-era rules this year.

Proponents of the CFPB rule say arbitration clauses in contracts for products such as bank accounts and credit cards make it too difficult for consumers to take companies to court. The CFPB rule still allows the use of mandatory arbitration clauses but prohibits covered entities from including agreements that block class-action litigation altogether. It also imposes data collection requirements for the continued use of mandatory arbitration clauses.

"Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together," CFPB Director Richard Cordray, an Obama appointee, said in a statement.

Those who oppose the rule say if enacted it would come at a significant cost to the financial industry and do little to benefit consumers, instead lining the pockets of the attorneys who represent them.

"There's a huge cost involved, and consumers hardly get any benefit out of class actions," said Alan Kaplinsky, partner at Ballard Spahr LLP who advises financial institutions on bank regulation. "The only people who benefit really are the plaintiff's class-action lawyers."

He said the financial services companies affected will now have to spend between $2.7 billion and $5.2 billion over the next five years to defend class actions.

A 2015 study by the CFPB on arbitration agreements found that most consumers are unaware of or confused about whether they are subject to arbitration clauses in agreements with financial service providers. The study found no evidence that arbitration clauses lead to lower prices for consumers. Of $2.7 billion in settlements in cash from class-action suits across a five-year period, 18% went to expenses and attorney's fees.

The rule is set to become effective 60 days after it is published in the Federal Register and will be applied to covered agreements entered into 181 days after that date. But that it will ever go into effect at all remains in question -- Congress could block it, and so could the courts.

"[W]e remain dubious that Congress will permit the rule to take effect," said Cowen analyst Jaret Seiberg in a note on Monday after the rule was announced, adding that he expects Congress to use the CRA to void the arbitration rule.

If that indeed happens, the CFPB would be barred from reinstating any similar rule in the future without the consent of Congress. That, Seiberg said, would be a positive for the banking industry.

Congress in May failed to roll back a separate rule by the CFPB intended to make prepaid payment cards more affordable and transparent. Compass Point analyst Isaac Boltansky said in a note the effort to reverse the arbitration rule is "far better positioned politically" than the prepaid rule, but the fate of the rule will "be determined by public perception" in the weeks to come.

"If the rule is tagged as an eleventh-hour policy aimed at padding the pockets of trial attorneys and setting the stage for an end to arbitration all together, then the odds will be modestly in favor of reversal," he said. If the rule is successfully framed as a valiant defense of consumer rights against Wall Street greed, then the odds will be against reversal."

Boltansky gives the CFPB's arbitration rule slightly less than a 50% chance of being reversed via the CRA.

Financial Services Committee Chairman Jeb Hensarling (R-TX) in a statement on Monday said the rule would "harm American consumers but thrill class action trial attorneys" and called on Congress to reject the rule using the CRA.

Kaplinsky said litigation challenges are possible to halt the rule. Politico reported that the U.S. Chamber of Commerce is considering filing a lawsuit, and numerous trade groups condemned the rule.

"We're disappointed that the CFPB has chosen to put class action lawyers -- rather than consumers -- first with today's final rule," said American Bankers Association president and CEO Rob Nichols in a statement. "Banks resolve the overwhelming majority of disputes quickly and amicably, long before they get to court or arbitration."

Originally, arbitration was primarily used for disagreements between two businesses, Cordray said in prepared remarks on a call with reporters on Monday. But companies about 25 years ago started adding such clauses to their consumer contracts to block group lawsuits and avoid legal accountability.

"The breadth and application of these clauses can be unexpected and severe," Cordray said. He pointed to Wells Fargo & Co.'s (WFC - Get Report) account fraud scandal, where the bank opened millions of deposit and credit card accounts without consumers' consent. "Arbitration clauses in existing account contracts blocked their customers from bringing group lawsuits for the unauthorized account openings," he said.

Senator Elizabeth Warren (D-MA), a vocal opponent of the big banks, applauded the CFPB rule as one that "will allow working families to hold big banks accountable when they're cheated and help discourage the kinds of surprise fees that consumers hate." She noted that the U.S. Chamber of Commerce and other groups are likely to "go all out" to get Republicans in Congress to reduce the rule. "Republicans will have to decide whether to defend the interests of their constituents or shield a handful of wealthy donors from accountability," she said.

Correction: The CFPB rule will apply to agreements entered into 181 days after its publication in the Federal Register. Story originally said 241.