Vice President Mike Pence cast the tie-breaking vote Tuesday night to repeal a rule that made it easier for Americans to sue their banks and credit card companies.
Senators passed the measure by a vote of 51-50, handing Wall Street its first major win since President Donald Trump took office in January.
Two Republican senators, Lindsey Graham of South Carolina and John Kennedy of Louisiana, sided with Democrats in opposition to the resolution.
Wiping out the rule would affect tens of millions of Americans who often don't know they are covered by an arbitration clause when they sign up for a credit card, checking account or prepaid card.
Many companies tuck arbitration clauses into contracts as a way to resolve disputes outside the court system, making it harder for an individual to bring a case against a bank or credit card company.
Republicans have balked at plans by the Consumer Financial Protection Bureau to bar companies from using arbitration clauses to stop consumers from bringing class-action suits. They've argued the rule issued in July was an egregious overstep by the head of the agency, Richard Cordray, a President Obama appointee.
Senate banking committee Chairman Mike Crapo blamed the agency for failing to re-examine the rule and develop alternatives.
"The CFPB chose an all-or-nothing approach, leaving Congress no choice but to overturn it," Crapo said in a statement.
The party-line vote is one of the last steps before the CFPB rule can be wiped out by Trump. The House voted 231-190 in July to overturn the rule. The measure now goes to the President's desk for his signature.
The White House lauded the move by senators as Congress standing up for everyday consumers.
"The evidence is clear that the CFPB's rule would neither protect consumers nor serve the public interest," the White House said in a statement. Instead, "consumers would have fewer options for quickly and efficiently resolving financial disputes."
Including Tuesday's action, GOP lawmakers have used procedures under the Congressional Review Act 14 times this year to kill rules completed during the final days of Barack Obama's presidency.
On Monday, the Treasury Department released a report opposing the rule, saying it would favor trial lawyers over consumers by prompting frivolous lawsuits.
Democrats such as Senate Minority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren defended the rule this week.
"This bill is a giant wet kiss to Wall Street," said Warren on the Senate floor Tuesday night as she defended maintaining the rule. "Bank lobbyists are crawling all over this place, begging Congress to vote and make it easier for them to cheat consumers."
Republican lawmakers argue the CFPB's own study shows consumers get more money in their pockets when they use arbitration as opposed to hiring expensive class-action trial lawyers.
Financial industry and business trade groups welcomed the latest step by Republican senators to eradicate the CFPB's rule.
"Arbitration results in better and quicker outcomes for consumers," said US Chamber of Commerce President and CEO Thomas Donohue in a statement.
Consumer advocates, however, said the vote was a tremendous setback for Americans, and that it offered companies like Wells Fargo and Equifax "a get-out-of-jail-free card."
"This repeal will hurt millions of consumers across the country by denying them their rightful day in court when they get screwed over by financial predators," Karl Frisch, executive director of Allied Progress, a consumer watchdog group, said in a statement.
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