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Fort Dodge, Iowa

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Courtney Mills
Courtney Mills
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Feingold – Johnson 2007 Eliminates Binding Arbitration Clauses

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Senator Russ Feingold (D-WI) and Representative Hank Johnson (D-GA) introduced legislation in July 2007 that will preclude big companies from including binding arbitration clauses in contracts with ordinary citizens. As the law now stands, consumer credit lenders use private arbitrators to litigate debt disputes with cardholders.

Most consumers do not even realize that they have signed away their rights to conventional litigation until it is too late, because the binding arbitration clause is buried deep in the cardholder agreement signed when the cardholder first receives the credit card.

The Feingold – Johnson Arbitration Fairness Act of 2007 aspires to achieve many goals, the primary among them being the wresting of binding arbitration out of the hands of credit card companies. Consumers do not receive a fair review in the arbitration process because the consumer always stands at a disadvantage compared to creditors. Creditors namely are essentially footing the bill for the arbitration process because the consumer credit lenders are responsible for sending business to arbitration groups. In this sense, binding arbitration is inherently biased toward big business.