Consumer Fairness Act of 2009

Consumer Fairness Act of 2009 - Amends the Consumer Credit Protection Act to treat as an unfair and deceptive trade act or practice under federal or state law any written provision in a consumer transaction or contract which requires binding arbitration to resolve a controversy arising out of or related to the transaction or contract, or the failure to perform any part.

Declares such a provision unenforceable.

Permits a written agreement to determine an existing controversy by binding arbitration if the parties agree after the controversy has arisen.

[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 991 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 991

    To treat arbitration clauses which are unilaterally imposed on 
consumers as an unfair and deceptive trade practice and prohibit their 
         use in consumer transactions, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 11, 2009

Mr. Gutierrez introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To treat arbitration clauses which are unilaterally imposed on 
consumers as an unfair and deceptive trade practice and prohibit their 
         use in consumer transactions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Fairness Act of 2009''.

SEC. 2. PROHIBITION ON ARBITRATION CLAUSES IMPOSED ON CONSUMERS WITHOUT 
              THEIR CONSENT.

    (a) In General.--The Consumer Credit Protection Act (15 U.S.C. 1601 
et seq.) is amended by adding at the end the following new title:

                     ``TITLE X--DISPUTE RESOLUTION

``SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.

    ``(a) Short Title.--This title may be cited as the `Consumer 
Fairness Act'.
    ``(b) Table of Contents.--The table of contents for this title is 
as follows:

                     ``TITLE X--DISPUTE RESOLUTION

``Sec. 1001. Short title; table of contents.
``Sec. 1002. Definitions.
``Sec. 1003. Prohibition on arbitration clauses imposed on consumers 
                            without their consent.

``SEC. 1002. DEFINITIONS.

    ``For purposes of this title, the following definitions shall 
apply:
            ``(1) Consumer.--The term `consumer' means any individual.
            ``(2) Consumer transaction.--The term `consumer 
        transaction' means the sale or rental of goods, services, or 
        real property, including an extension of credit or the 
        provision of any other financial product or service, to an 
        individual in a transaction entered into primarily for 
        personal, family, or household purposes.
            ``(3) Consumer contract.--The term `consumer contract' 
        means any written, standardized form contract between the 
        parties to a consumer transaction.

``SEC. 1003. PROHIBITION ON ARBITRATION CLAUSES IMPOSED ON CONSUMERS 
              WITHOUT THEIR CONSENT.

    ``(a) In General.--A written provision in any consumer transaction 
or consumer contract which requires binding arbitration (whether by the 
terms of such transaction or contract directly or at the request of any 
party to the transaction or contract) to resolve any controversy 
arising out of or related to the transaction or contract, or the 
failure to perform the whole or any part of the transaction or contract 
shall constitute a violation of this title, shall not be enforceable, 
and shall be treated as an unfair and deceptive trade act or practice 
under Federal or State law.
    ``(b) Post-Controversy Agreements.--Subsection (a) shall not apply 
with respect to a written agreement to determine by binding arbitration 
an existing controversy arising out of a consumer transaction or 
consumer contract if the written agreement has been entered into by the 
parties to the consumer transaction or consumer contract after the 
controversy has arisen.
    ``(c) Compliance.--Compliance with the requirements of this title 
shall be enforced in the same manner as compliance with the 
requirements imposed under the preceding title are enforced under 
section 917 of such title.
    ``(d) Coordination With Other Law.--No provision of this section 
shall be construed as annulling, altering, affecting, or superseding 
any Federal law, or the laws of any State, relating to arbitration in 
connection with consumer transactions or consumer contracts, except to 
the extent that those laws are inconsistent with the provisions of this 
section, and then only to the extent of the inconsistency.''.
    (b) Applicability.--The amendments made by this section shall apply 
to all consumer transactions and consumer contracts entered into on, or 
after the date of the enactment of this Act, amendments entered into on 
or after such date of enactment to any consumer transaction or consumer 
contract without regard to the date such transaction was consummated or 
such contract entered into, and to all controversies pending or filed 
on, or arising after, the date of such date of enactment.
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