Volatility

November 26, 2009

A Small Step

Filed under: Law — Russ @ 7:13 am
A few months ago I wrote about how a corrupt, Kafkaesque arbitration system had been set up by the banks to bilk consumers and deny them access to the law. Minnesota had sued the most prominent of these “arbitrators”, the National Arbitration Forum, alleging fraud.

Today I came upon some good news.

 
 

JP Morgan Chase became the first bank to drop its arbitration clause from its credit card contracts, so Chase credit card holders will have the right to go to court to dispute a problem with its credit card decisions.

This decision was part of a settlement of an antitrust lawsuit filed by Minnesota Attorney General Lori Swanson that involved the largest arbitration company, the National Arbitration Forum, in July. The Forum is no longer part of the process of consumer-debt arbitration, but the banks have not yet settled the suit. This move by Chase will likely encourage other banks to do the same thing.

 
The piece goes on to say that BofA, under pressure, has also stopped the practice (although it hasn’t yet settled the suit), and another big arbitration firm, the American Arbitration Association, has stopped participating in consumer debt collection.
 
So that’s one decent piece of news. I’m thankful for it. 🙂
 

This will be a big win for consumers. Companies prevail over consumers in 94 percent of the cases that go into arbitration. The NAF processed 214,000 consumer-debt obligation claims in 2006. It oversees 1,000 attorneys and former judges who handle the cases.

Now that Chase has settled, it’s only a matter of time before the others decide to settle as well. Consumers everywhere may soon have the right to go to court if they have a problem with their credit card company.

2 Comments

  1. Any and all advances against the harsh strictures imposed by the kleptocracy on we peons will come, by necessity, from the “bottom up”, as is illustrated in your post. And FWIW, I define bottom liberally such that “local” courts are included in the definition.

    Comment by Edwardo — November 27, 2009 @ 3:46 pm

  2. Yes, good action can come at some of the lower government levels.

    These days the only place you’ll somnetimes find real regulation is at the state level. Which is why one of the federal corporatist projects, with support from both national parties, is to use federal “reform” bills as trojan horses pre-empting state regulation.

    That’s what they want to use the CFPA to do.

    Comment by Russ — November 27, 2009 @ 5:07 pm


RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

%d bloggers like this: