I 
108TH CONGRESS 
1ST SESSION H. R. 1887
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 
APRIL 30, 2003
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 Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Consumer Fairness 
Act of 2003’’.
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 with-
out 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 exten-
sion 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 house-
hold purposes. 
‘‘(3) CONSUMER
CONTRACT.—The term ‘con-
sumer contract’ means any written, standardized 
form contract between the parties to a consumer 
transaction. 
‘‘SEC. 1003. PROHIBITION ON ARBITRATION CLAUSES IM-
POSED ON CONSUMERS WITHOUT THEIR 
CONSENT. 
‘‘(a) IN GENERAL.—A written provision in any con-
sumer transaction or consumer contract which requires 
binding arbitration (whether by the terms of such trans-
action 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.—Sub-
section (a) shall not apply with respect to a written agree-
ment to determine by binding arbitration an existing con-
troversy arising out of a consumer transaction or con-
sumer contract if the written agreement has been entered
into by the parties to the consumer transaction or con-
sumer contract after the controversy has arisen. 
‘‘(c) COMPLIANCE.—Compliance with the require-
ments 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 provi-
sion of this section shall be construed as annulling, alter-
ing, 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 provi-
sions 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 con-
sumer 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.
Æ