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Credit Card Companies Arbitration Most credit card holders do not realize that there is a clause in the contract they signed when they first obtained their card that requires them to settle any future disputes with the issuer through arbitration, not through trial. Arbitration is a form of alternative dispute resolution (ADR) in which an allegedly neutral person evaluates the claims of the conflicting parties and then issues a resolution that is legally binding on both sides. It is very different from mediation, in which the neutral person encourages negotiations between the conflicting parties in an effort to reach a compromise; if he or she does suggest a solution here, it is not legally binding on anyone. Credit card companies are said to like the mandatory arbitration procedures to settle disputes because they are far less expensive and much more prompt than court trials, and the companies assume that credit card users prefer them for the same reasons. The problem, of course, comes in the neutrality of the arbitrators who conduct the hearings and issue the verdicts. Arbitrators are normally employed on a part-time basis by forprofit companies such as the National Arbitration Forum or non-profit groups such as the American Arbitration Association. The credit card companies contract with one of the companies or groups to assign and compensate the arbitrators, most of whom are lawyers who are frequently retired but looking for additional income. The New York Times (July 22,2009 ) reported that most arbitrators earn about $400 per hour, though some are paid as much as $10,000 per day. The New York Times also said, in that same article, that in cases where the arbitrators had been assigned and paid by the National Arbitration Forum to settle disputes between business firms and individual creditors, the rulings favored the business firms 94 percent of the time. The New York Times article was apparently published in anticipation of a hearing by a congressional committee on a proposal to ban compulsory arbitration clauses from all credit card contracts as part of a push for more consumer protection. Earlier in the summer of 2009 , Congress had passed, and President Obama had signed, new financial regulations that banned interest rate hikes or penalty fee increases on personal credit cards without an adequate (45-day) notice. The proposed ban on compulsory arbitration clauses was said by advocates to be the needed third leg for that stool. The credit card companies and the banks that issued those cards objected strongly. They claimed that not only would this new requirement drive up the costs and delays of reaching settlements, it would also open the door for class-action lawsuits that could drag on for years, and result in unfair awards by inflamed juries. Class Assignment The assignment for this short case is divided into two parts: First, what is your view of compulsory arbitration requirements: should they be permitted or banned, and why? Structure your decision so that you can convince others. Second, have you had any disputes with your credit card company that proved difficult to resolve, and wha changes in the law would you recommend to avoid that type of dispute or to facilitat the sort of resolution you believe to be needed