Leading the Fight Against Wrongful Arbitration - Legislation

Do the Credit Industries Mold Social Policy for Their Own Greed?

nospam@example.com (Steve) — Sat, 04 Aug 2007 09:50:08 -0700

Has the increasing willingness AND ABILITY of the credit industry to influence legislation molded social polices in America to the detriment of American Consumers?

The Credit industry in America wields tremendous powers over economic facets of society. Consumer credit enables consumers to drive industry output, itself dependent upon the financing markets to be able to produce the demanded output. Consumer households, depending on how you count the numbers, average $2,250 to $10,000 in credit card debt, all across the county.

See for example the Federal Reserve Board Statistical Releases, which state in May 2007, the revolving credit held by American households neared $900 Billion. This translates to over $7,000 per household.

The profitability of credit products, however, has not yielded enough for these businesses. The highest credit card profits are late fees, over limit fees, expanded interest charges, and annual fees. The credit card holder that pays off the bill every month is simply not profitable. The CREDIT CARD industry convinced Congress to pass the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, after massive lobbying (seven prior attempts failed.)

In this University of Iowa study, it's pointed out that while the Act was sold as preventing 'immoral' American families seeking protections under bankruptcy, in fact Credit Card companies seek these families out AFTER BANKRUPTCY:

Rather than eschewing them as profligates, the lending industry treats families who seek bankruptcy relief as a lucrative
source for profits. The widespread marketing to families after bankruptcy provides a powerful example of the credit industry’s willingness and ability to profit from financially distressed and vulnerable consumers. The law shapes creditors’ marketing and lending decisions to recently bankrupt families, but this effect was hidden during the past decade of bankruptcy reform.

What's Happened to A.B. 2574 and CCCP Section 1281.92?

nospam@example.com (Steve) — Thu, 02 Aug 2007 22:30:53 -0700

Assembly Bill 2574 led to the California Code of Civil Procedure Section 1281.92; this became California law January 1, 2003. It became law with a few other Assembly Bills which also added codifications regarding arbitrations between consumers and big business.

Four and a half years later, it is worth taking a look at what has happened.

The Bill Topic is defined as "Conflicts of Interest" and reviewing the April 23, 2002 Hearing summary reveals these findings in the California capital:

KEY ISSUES : SHOULD PRIVATE JUDGING COMPANIES BE TREATED
CONSISTENTLY WITH JUDGES, ARBITRATORS AND OTHER PERSONS
PERFORMING PUBLIC FUNCTIONS IN KEEPING AN ARM'S-LENGTH DISTANCE
FROM PARTIES TO CONSUMER ARBITRATIONS?

It's obvious from the passage of this bill (30 ayes and 2 noes) that the California legislature deemed the answer a resounding "YES".

Consistently with the other bills the Committee is hearing
regarding consumer arbitration, this bill would address
egregious conflict of interest problems in consumer arbitrations
by prohibiting private judging companies from administering the
consumer arbitrations of parties with whom they have significant
financial investments and other financial relationships.

The legislature clearly recognized the justice may very well be sold.....
Continue reading "What's Happened to A.B. 2574 and CCCP Section 1281.92?"

The Arbitration Fairness Act of 2007

nospam@example.com (Steve) — Thu, 12 Jul 2007 11:28:00 -0700

In an effort to ban MANDATORY BINDING ARBITRATION clauses in consumer disputes and other areas, Senator Russ Feingold (D-WI) and Representative Hank Johnson (D-GA) are introducing The Arbitration Fairness Act of 2007.

This legislation is supported by many consumer rights organizations. Significant areas of impact will be in:

Consumer credit card accounts - where the credit card issuer strips the account holder of their right to a jury trial by using the arbitration clause

Employment law -

Medical providers - healthcare providers -

Investors