- Joined
- May 29, 2026
- Messages
- 14
- Thread Author
- #1
CONGRESS OF THE
COMMONWEALTH OF REDMONT
COMMONWEALTH OF REDMONT
A BILL TO
ESTABLISH AN EXPEDITED, BANK-FUNDED ARBITRATION PROCESS FOR DEFAULTED LOANS
The people of the Commonwealth of Redmont, through their elected Representatives in Congress and the force of law ordained to that Congress by the people through the Constitution, do hereby enact the following provisions into law:
PART I — PRELIMINARIES
1. Short Title and Enactment
(1) This Act may be cited as the ‘Banking Arbitration Act.’
(2) This Act shall be enacted fourteen days after receiving presidential assent.
(3) This Act has been authored by PlayerData.
(4) This Act has been co-sponsored by alexis_123003.
(5) This Act amends the following Acts:
(a) Contracts Act;
(b) Credit Standards Act;
(c) Judicial Standards Act; and
(d) Economic Standards Act.
2. Reasons and Intent
(1) Banks, credit unions, and other lawfully registered Financial Institutions provide loans that support commerce, investment, property ownership, and economic activity within Redmont.
(2) When a Borrower defaults on a valid Loan Agreement, a Financial Institution may be required to complete lengthy ordinary civil proceedings before recovering money that it is contractually owed.
(3) Prolonged debt-recovery proceedings increase legal and administrative costs, reduce the funds available for future lending, and may negatively affect the stability of Financial Institutions and the wider economy.
(4) Most loan-default disputes can be resolved through written contracts, transaction records, payment histories, default notices, and balance calculations without requiring the complete procedure of an ordinary civil trial.
(5) This Act establishes a specialized, document-first arbitration process for qualifying Defaulted Loan Disputes.
(6) A Banking Arbitrator shall review the evidence and issue a binding Arbitration Award.
(7) An Arbitration Award issued under this Act shall constitute a final and enforceable determination of the Defaulted Loan Dispute, subject to the appeal provisions established by this Act.
(8) An Arbitration Award shall not require review or confirmation by a Magistrate or another Judicial Officer before becoming binding or enforceable.
(9) The Department of Justice shall appoint and supervise Banking Arbitrators and administer the banking-arbitration system.
(10) The arbitration process shall avoid unnecessary discovery, opening statements, closing statements, witness proceedings, and repetitive litigation.
(11) Uncontested proceedings should ordinarily result in an Arbitration Award within five days after filing.
(12) Contested proceedings should ordinarily result in an Arbitration Award within eight days after filing.
(13) Banking Arbitrators shall not be directly selected, employed, or compensated by a participating Financial Institution.
(14) The costs of administering the arbitration system shall be funded by the Eligible Financial Institutions that use it and shall not be imposed upon taxpayers or Borrowers.
(15) This Act creates a narrow exception to the general prohibition on binding arbitration and does not authorize mandatory arbitration outside qualifying Defaulted Loan Disputes.
3. Definitions
For the purposes of this Act:
(1) Arbitration Agreement means a written provision in a Loan Agreement authorizing a Defaulted Loan Dispute to be submitted to binding arbitration under this Act.
(2) Arbitration Application means an application filed by an Eligible Financial Institution under Part III.
(3) Arbitration Award means the Banking Arbitrator’s binding written findings, conclusions, and ordered relief under this Act.
(4) Arbitration Record means all applications, responses, evidence, procedural orders, hearing records, and submissions considered by the Banking Arbitrator.
(5) Banking Arbitration Office means the division or administrative body established within the Department of Justice to administer this Act.
(6) Banking Arbitrator means a person appointed by the Attorney General to conduct proceedings and issue binding Arbitration Awards under this Act.
(7) Borrower means a person or legal entity that received money under a Loan Agreement.
(8) Complex Dispute means a contested Defaulted Loan Dispute involving exceptional circumstances that prevent determination within the ordinary expedited timeline, including:
(a) A substantial allegation of fraud or forgery;
(b) Multiple Loan Agreements;
(c) Multiple Borrowers or guarantors;
(d) A material dispute concerning ownership of collateral;
(e) A substantial volume of relevant evidence; or
(f) Another comparable circumstance identified in writing by the Banking Arbitrator.
(9) Default means a Borrower’s failure to make a repayment or perform another material repayment obligation by the date required under a Loan Agreement after any applicable contractual grace or cure period has expired.
(10) Defaulted Loan Dispute means a dispute arising from an alleged breach of a qualifying Loan Agreement concerning:
(a) Whether a valid Loan Agreement exists;
(b) Whether the Eligible Financial Institution provided the agreed funds;
(c) Whether the Borrower Defaulted;
(d) The amount of principal, contractual interest, or lawful fees outstanding;
(e) The enforcement of collateral expressly identified in the Loan Agreement; or
(f) A defense directly related to the validity, performance, or enforcement of the Loan Agreement.
(11) Eligible Financial Institution means a Commercial Bank, Investment Bank, or Credit Union that:
(a) Is lawfully registered and in good standing;
(b) Is legally authorized to provide the Loan Agreement at issue;
(c) Is compliant with applicable Department of Commerce requirements; and
(d) Where applicable, is compliant with Federal Reserve Bank requirements.
(12) Loan Agreement means a written contract under which an Eligible Financial Institution provides money to a Borrower in exchange for deferred repayment.
(13) Notice of Default means written notice informing the Borrower:
(a) That the Eligible Financial Institution considers the Loan Agreement to be in Default;
(b) Of the factual and contractual basis for the alleged Default;
(c) Of the amount alleged to be outstanding;
(d) Of the action required to cure the Default;
(e) Of any remaining cure deadline; and
(f) That banking arbitration may be commenced if the Default is not cured.
(14) Uncontested Application means an Arbitration Application to which the Borrower has not filed a timely response.
4. Jurisdiction and Scope
(1) This Act applies only to claims founded upon breach of contract arising from a qualifying Loan Agreement.
(2) The total value of a claim submitted under this Act shall not exceed $120,000.
(3) The value of a claim includes:
(a) Outstanding principal;
(b) Contractual interest accrued before filing;
(c) Lawful contractual fees; and
(d) The value of any requested collateral.
(4) Legal fees shall not be awarded in a proceeding under this Act and shall not be added to the value of the claim.
(5) Arbitration filing fees and Banking Arbitrator compensation shall not be recoverable from the Borrower.
(6) This Act does not apply to:
(a) Employment disputes;
(b) Deposit-account disputes;
(c) Investment disputes;
(d) Insurance disputes;
(e) Consumer purchases unrelated to a Loan Agreement;
(f) Criminal proceedings;
(g) Personal-injury claims;
(h) Bankruptcy proceedings; or
(i) A claim exceeding $120,000.
PART II — BANKING ARBITRATION OFFICE
1. Establishment
(1) The Department of Justice shall establish and administer the Banking Arbitration Office.
(2) The Banking Arbitration Office shall be responsible for:
(a) Receiving Arbitration Applications;
(b) Maintaining the arbitration docket;
(c) Assigning applications to Banking Arbitrators;
(d) Serving administrative notices;
(e) Collecting filing fees;
(f) Maintaining Arbitration Records;
(g) Registering Arbitration Awards;
(h) Assisting with lawful enforcement;
(i) Publishing standard forms and procedures; and
(j) Publishing the reports required under this Act.
(3) The Attorney General may delegate administrative responsibilities under this Act to another Department of Justice official.
(4) Delegation under subsection (3) shall not prevent the Attorney General from reviewing the administration of the system or exercising any power granted by this Act.
2. Appointment of Banking Arbitrators
(1) The Attorney General shall appoint at least one Banking Arbitrator.
(2) The Attorney General may appoint additional Banking Arbitrators where reasonably necessary to maintain the timelines established by this Act.
(3) A Banking Arbitrator must:
(a) Be a member of the Redmont Bar Association in good standing, a current or former Judicial Officer, or possess comparable legal and financial qualifications accepted by the Attorney General;
(b) Demonstrate knowledge of contract, credit, evidence, and financial law;
(c) Not be employed by or serve as an officer of an Eligible Financial Institution;
(d) Not hold a material financial interest in an Eligible Financial Institution; and
(e) Disclose any relationship that may reasonably create an appearance of bias.
(4) The Attorney General shall publish the name and qualifications of each Banking Arbitrator.
(5) A Banking Arbitrator shall serve at the pleasure of the Attorney General.
(6) The Attorney General may remove or suspend a Banking Arbitrator for:
(a) Misconduct;
(b) Bias or conflict of interest;
(c) Dereliction of duty;
(d) Repeated or material legal error;
(e) Repeated failure to comply with statutory deadlines;
(f) Breach of confidentiality;
(g) Abuse of authority; or
(h) Incapacity to perform the position.
(7) The Attorney General shall provide written reasons for the removal of a Banking Arbitrator.
3. Assignment of Applications
(1) The Banking Arbitration Office shall assign each accepted Arbitration Application to an available Banking Arbitrator.
(2) An Eligible Financial Institution shall not select the Banking Arbitrator assigned to its application.
(3) A Borrower shall not select the Banking Arbitrator assigned to an application.
(4) The Banking Arbitration Office may use random assignment, rotating assignment, workload-based assignment, or another neutral method established by Department of Justice regulation.
(5) The method of assignment shall not take into account:
(a) The identity of the Financial Institution;
(b) The identity of the Borrower;
(c) The amount claimed;
(d) The likelihood that either party will prevail; or
(e) The outcome desired by a party.
4. Availability
(1) The Attorney General shall ensure that at least one Banking Arbitrator is reasonably available whenever the banking-arbitration system is operational.
(2) Where an assigned Banking Arbitrator is unavailable for more than forty-eight hours, the Banking Arbitration Office may:
(a) Reassign the application;
(b) Assign an acting Banking Arbitrator; or
(c) Request that the Attorney General appoint an additional Banking Arbitrator.
(3) The absence of a particular Banking Arbitrator shall not indefinitely stay a proceeding.
5. Independence
(1) A Banking Arbitrator shall exercise independent judgment when deciding an Arbitration Application.
(2) The Attorney General, another Department of Justice official, or an employee of the Banking Arbitration Office shall not direct a Banking Arbitrator to decide a particular application in favour of a particular party.
(3) Administrative supervision by the Department of Justice may include:
(a) Monitoring compliance with deadlines;
(b) Reviewing complaints about conduct;
(c) Maintaining records;
(d) Auditing fee collection;
(e) Establishing procedural standards; and
(f) reviewing whether Banking Arbitrators comply with this Act.
(4) Administrative supervision shall not include altering an Arbitration Award after it is issued, except through a correction permitted under Part IV, Section 3.
PART III — AUTHORITY AND CONDUCT OF BANKING ARBITRATORS
1. Authority
(1) A Banking Arbitrator may:
(a) Receive and review Arbitration Applications;
(b) Accept or reject applications;
(c) Determine procedural matters;
(d) Request relevant evidence;
(e) Order production of specific relevant documents;
(f) Conduct limited hearings where necessary;
(g) Make findings of fact and law;
(h) Issue binding Arbitration Awards; and
(i) Order any relief authorized by this Act.
(2) A Banking Arbitrator may not:
(a) Exercise contempt powers;
(b) Impose criminal penalties;
(c) Grant relief outside the scope of this Act;
(d) Grant relief against a person who was not a party to the Loan Agreement;
(e) Award punitive damages;
(f) Award legal fees; or
(g) Create binding legal precedent.
(3) An Arbitration Award shall be enforceable in accordance with Part V.
2. Impartiality
(1) A Banking Arbitrator must act impartially and provide each party with a fair opportunity to present their position.
(2) A Banking Arbitrator must recuse themself where:
(a) They possess a personal or financial interest in the outcome;
(b) They previously represented or advised a party concerning the dispute;
(c) They have a material relationship with a party;
(d) They have made a public statement demonstrating prejudgment of the dispute; or
(e) A reasonable person would doubt their impartiality.
(3) A party may request the recusal of a Banking Arbitrator before the Arbitration Record closes.
(4) A recusal request must identify the facts allegedly creating bias or a conflict of interest.
(5) The Attorney General or a delegated Department of Justice official shall determine a contested recusal request within twenty-four hours.
(6) A determination under subsection (5) shall address only whether reassignment is necessary and shall not determine the merits of the Arbitration Application.
3. Communications
(1) Ex parte communication concerning the merits of a proceeding is prohibited.
(2) Administrative communication concerning filing, service, scheduling, or technical matters is permitted.
(3) Where a Banking Arbitrator receives an improper communication concerning the merits:
(a) The communication shall be disclosed to all parties;
(b) The communication shall be added to the Arbitration Record; and
(c) The Banking Arbitrator shall consider whether recusal is required.
4. Compensation and Benefits
(1) A Banking Arbitrator shall not accept any direct payment, gift, employment, benefit, or compensation from a party.
(2) Banking Arbitrator compensation shall be paid through the Department of Justice from fees collected under this Act.
(3) Compensation shall not depend upon:
(a) Which party prevails;
(b) The amount awarded;
(c) The number of awards issued in favor of Financial Institutions;
(d) Whether an application is contested; except where additional compensation reflects additional work performed; or
(e) Whether an Arbitration Award is appealed, affirmed, modified, or vacated.
PART IV — ARBITRATION PROCEEDINGS
1. Permitted Arbitration Agreements
(1) An Eligible Financial Institution may include an Arbitration Agreement in a Loan Agreement.
(2) An Arbitration Agreement is enforceable only where it:
(a) Is written clearly and conspicuously;
(b) Expressly applies only after Default;
(c) Identifies this Act as governing the process;
(d) States that the Banking Arbitrator may issue a binding Arbitration Award;
(e) States that the Arbitration Award does not require confirmation by a Magistrate or another Judicial Officer;
(f) Explains the Borrower’s right to notice, respond, present evidence, and appeal the Arbitration Award;
(g) Explains the applicable appeal procedure;
(h) States that the Eligible Financial Institution shall pay all arbitration fees; and
(i) Is affirmatively accepted by the Borrower as part of the Loan Agreement.
(3) An Arbitration Agreement may not:
(a) Prevent a Borrower from raising a lawful defense;
(b) Authorize fees, interest, or damages not otherwise permitted by law or contract;
(c) Require the Borrower to fund the arbitration;
(d) Eliminate the Borrower’s right to appeal under this Act;
(e) Authorize enforcement procedures inconsistent with this Act;
(f) Shorten a statutory limitation period;
(g) Apply to a dispute outside the scope of this Act; or
(h) Authorize procedures inconsistent with this Act.
(4) A provision inconsistent with this Act shall be void to the extent of the inconsistency without invalidating the remainder of the Loan Agreement.
2. Existing Loan Agreements
(1) An arbitration clause entered before the enactment of this Act shall not automatically become enforceable because of this Act.
(2) A pre-existing Loan Agreement may be submitted to banking arbitration only where:
(a) Both parties voluntarily agree in writing after enactment; or
(b) The Loan Agreement is lawfully amended and the Borrower affirmatively accepts a compliant Arbitration Agreement.
(3) A refusal to amend a pre-existing Loan Agreement shall not alter the parties’ existing contractual rights.
3. Notice and Cure
(1) An Eligible Financial Institution must issue a Notice of Default before filing an Arbitration Application.
(2) Where the Loan Agreement contains a contractual grace or cure period, arbitration may commence after that period expires.
(3) Where the Loan Agreement contains no grace or cure period, the Notice of Default must provide the Borrower with seventy-two hours to cure the Default.
(4) This Act does not require a second cure period after an existing contractual cure period has expired.
(5) Arbitration may not be commenced or continued while:
(a) A cure period remains open;
(b) A timely payment is awaiting reasonable verification;
(c) The parties have an active repayment arrangement with which the Borrower remains compliant;
(d) An automatic bankruptcy stay applies; or
(e) Another lawful restriction prevents collection.
4. Filing an Arbitration Application
(1) An Eligible Financial Institution may commence arbitration by filing an Arbitration Application with the Banking Arbitration Office.
(2) The application must include:
(a) The complete Loan Agreement;
(b) The Arbitration Agreement;
(c) Evidence that the funds were provided;
(d) The Borrower’s payment history;
(e) The Notice of Default;
(f) Proof of service;
(g) A calculation of the amount allegedly outstanding;
(h) Documents supporting any claimed collateral rights; and
(i) The required filing fee.
(3) The application must be served upon the Borrower at the same time it is filed.
(4) The Eligible Financial Institution shall not intentionally conceal, alter, or omit material information.
5. Initial Review
(1) Within twenty-four hours of receiving an Arbitration Application, the assigned Banking Arbitrator shall:
(a) Confirm that the application is complete;
(b) Confirm that the dispute falls within this Act;
(c) Confirm that the total value does not exceed $120,000;
(d) Confirm that service has been completed;
(e) Accept the application and issue the response deadline; or
(f) Reject the application without prejudice and identify the defect.
(2) A corrected application may be resubmitted.
(3) Acceptance of an application does not constitute a finding that the Eligible Financial Institution is entitled to relief.
6. Borrower Response
(1) The Borrower shall have seventy-two hours after service of an accepted application to file a response.
(2) The response may:
(a) Admit or deny Default;
(b) Dispute the amount claimed;
(c) Contest the validity or enforceability of the Loan Agreement;
(d) Present evidence of payment;
(e) Raise fraud, misrepresentation, mistake, duress, illegality, set-off, or another lawful defense;
(f) Contest a claimed right to collateral; or
(g) Request a hearing.
(3) A hearing request does not automatically require a hearing.
(4) The Banking Arbitrator may grant one extension of no more than forty-eight hours where circumstances outside the Borrower’s reasonable control prevent a timely response.
(5) An extension must be issued in writing and explain the reason.
7. Uncontested Applications
(1) Where no timely response is filed, the application becomes an Uncontested Application.
(2) Failure to respond does not automatically establish liability.
(3) The Banking Arbitrator must independently determine whether:
(a) A valid Loan Agreement exists;
(b) A valid Arbitration Agreement exists;
(c) The Eligible Financial Institution provided the funds;
(d) Proper notice was given;
(e) Default occurred;
(f) The claimed amount is supported by the evidence; and
(g) The requested relief is lawful.
(4) No discovery, opening statement, closing statement, witness examination, or hearing shall be required.
(5) The Banking Arbitrator shall issue an Arbitration Award within twenty-four hours after the response deadline expires.
8. Contested Applications
(1) Where a timely response disputes a material issue, the application becomes contested.
(2) Each party shall have forty-eight hours after the response is filed to submit final documents.
(3) The Eligible Financial Institution’s final submission shall be limited to matters raised in the Borrower’s response.
(4) General discovery shall not apply.
(5) A party may request a specific document only where:
(a) The document is directly relevant to a material issue;
(b) The document is identified with reasonable specificity; and
(c) The requesting party cannot reasonably obtain it independently.
(6) The Banking Arbitrator shall determine a document request within twenty-four hours.
(7) A party ordered to provide a document shall do so within twenty-four hours unless exceptional circumstances justify additional time.
(8) The proceeding shall be determined on written evidence unless a hearing is necessary to resolve:
(a) A material factual dispute;
(b) A material credibility issue; or
(c) A question that cannot reasonably be determined from the written record.
(9) A hearing shall:
(a) Occur within seventy-two hours after the response deadline where reasonably possible;
(b) Be limited to identified disputed issues;
(c) Provide each party an equal opportunity to participate; and
(d) Exclude unnecessary opening or closing statements.
(10) The Arbitration Record closes:
(a) At the end of the final-document period;
(b) At the conclusion of a hearing; or
(c) At the expiration of an ordered-document deadline.
(11) The Banking Arbitrator shall issue an Arbitration Award within forty-eight hours after the Arbitration Record closes.
9. Complex Disputes
(1) A contested application may be designated a Complex Dispute only where exceptional circumstances under Part I, Section 3 are present.
(2) The designation must:
(a) Be issued in writing;
(b) Identify the exceptional circumstances;
(c) State which deadline cannot reasonably be met; and
(d) Establish a replacement deadline.
(3) An Arbitration Award in a Complex Dispute must be issued no later than five days after the Arbitration Record closes.
(4) A dispute shall not be designated complex solely because:
(a) Liability is denied;
(b) A party requests a hearing;
(c) A party is represented by an attorney;
(d) The amount claimed is substantial; or
(e) The Banking Arbitrator has other pending matters.
10. Burdens and Evidence
(1) The standard of proof shall be the balance of probabilities.
(2) The Eligible Financial Institution bears the burden of establishing:
(a) The validity of the Loan Agreement;
(b) The validity of the Arbitration Agreement;
(c) The provision of funds;
(d) The occurrence of Default; and
(e) The amount lawfully outstanding.
(3) A party asserting an affirmative defense bears the burden of establishing that defense.
(4) The Banking Arbitrator may:
(a) Request additional evidence;
(b) Require correction or clarification of a calculation;
(c) Ask questions of either party;
(d) Exclude irrelevant, unreliable, repetitive, or materially misleading evidence;
(e) Consolidate disputes arising from the same Loan Agreement; and
(f) Dismiss an application outside the scope of this Act.
(5) Ordinary Court Rules and Procedures shall not apply unless:
(a) Expressly incorporated by this Act;
(b) Incorporated by a Department of Justice regulation issued under this Act; or
(c) Necessary to preserve fundamental procedural fairness.
11. Arbitration Award
(1) An Arbitration Award must contain:
(a) The identities of the parties;
(b) A summary of the relevant facts;
(c) The material evidence considered;
(d) Findings concerning the Loan Agreement;
(e) Findings concerning Default;
(f) A calculation of the amount lawfully outstanding;
(g) The relief ordered;
(h) Notice that the Arbitration Award is binding and enforceable;
(i) Notice of the right to appeal; and
(j) The deadline for filing an appeal.
(2) An Arbitration Award may order:
(a) Payment of outstanding principal;
(b) Contractual interest permitted by law;
(c) Contractual fees permitted by law;
(d) A reasonable repayment schedule;
(e) Enforcement of a contractual right to identified collateral;
(f) Dismissal of the Arbitration Application; or
(g) Other relief directly necessary to enforce the Loan Agreement.
(3) An Arbitration Award may not order:
(a) Punitive damages;
(b) Legal fees;
(c) Undisclosed interest or fees;
(d) Criminal penalties;
(e) Relief unrelated to the Loan Agreement;
(f) Relief against a non-party; or
(g) Relief causing the total claim value to exceed $120,000.
(4) An Arbitration Award:
(a) Is binding upon the parties upon issuance;
(b) Does not require confirmation by a Magistrate or another Judicial Officer;
(c) Shall be administratively registered by the Department of Justice without reconsideration of its merits;
(d) May be enforced through the procedures established under this Act; and
(e) Does not independently create binding precedent.
PART V — REGISTRATION AND ENFORCEMENT
1. Registration
(1) Immediately after issuing an Arbitration Award, the Banking Arbitrator shall transmit the following to the Banking Arbitration Office:
(a) The Arbitration Award;
(b) The complete Arbitration Record;
(c) A procedural timeline;
(d) Proof of service; and
(e) Any conflict disclosures.
(2) The Banking Arbitration Office shall administratively register the Arbitration Award.
(3) Registration under this section shall be ministerial and shall not require:
(a) Review by a Magistrate or another Judicial Officer;
(b) A new civil complaint;
(c) A summons;
(d) Discovery;
(e) Opening or closing statements; or
(f) An ordinary court trial.
(4) Administrative registration shall not permit the Department of Justice to reconsider the merits of the Arbitration Award.
(5) An Arbitration Award shall remain valid and binding regardless of an administrative delay in registration.
(6) The Department of Justice shall maintain a public register of Arbitration Awards, subject to the redaction of confidential financial information.
2. Enforcement
(1) A registered Arbitration Award shall be enforceable as a civil debt determination under this Act.
(2) The prevailing party may request enforcement assistance from the Department of Justice.
(3) The Department of Justice may use any lawful debt-enforcement procedure available to enforce the Arbitration Award.
(4) No compulsory collection, seizure, transfer of collateral, or similar enforcement may begin until twenty-four hours after the Arbitration Award has been served upon both parties.
(5) Filing an application for leave to appeal shall not automatically stay enforcement.
(6) The Federal Court may issue a temporary stay where necessary to prevent substantial and irreparable injustice.
(7) Only the relief expressly ordered in the Arbitration Award may be enforced.
(8) The Department of Justice shall not collect an amount exceeding the relief specified in the Arbitration Award.
3. Correction of Errors
(1) Either party may request correction of an obvious clerical, transcription, or mathematical error within twenty-four hours after the Arbitration Award is issued.
(2) A correction request shall not permit reconsideration of the merits.
(3) The Banking Arbitrator shall determine the request within twenty-four hours.
(4) A corrected Arbitration Award shall replace the original Arbitration Award.
(5) The Banking Arbitration Office shall update the public register where an Arbitration Award is corrected.
4. Satisfaction of Award
(1) Where an Arbitration Award has been fully satisfied, the prevailing party shall notify the Banking Arbitration Office within forty-eight hours.
(2) The Banking Arbitration Office shall mark the Arbitration Award as satisfied.
(3) An Eligible Financial Institution shall not continue enforcement after an Arbitration Award has been fully satisfied.
(4) Failure to report satisfaction of an Arbitration Award may constitute abuse of process under Part IX.
PART VI — APPEAL
1. Application for Leave to Appeal
(1) A party may apply to the Federal Court for leave to appeal an Arbitration Award within seventy-two hours after the Arbitration Award is issued.
(2) Leave may be granted only where the application raises:
(a) A substantial constitutional question;
(b) A question of law of general public importance;
(c) A serious jurisdictional error;
(d) A serious allegation of fraud or impartiality affecting the proceeding;
(e) A clear conflict with binding precedent; or
(f) A clear and material legal error that caused substantial injustice.
(3) Mere disagreement with:
(a) The weight assigned to evidence;
(b) A credibility determination;
(c) The amount awarded; or
(d) A reasonable factual finding
shall not independently justify leave to appeal.
(4) An application for leave shall not constitute a complete rehearing.
(5) Filing an application for leave shall not automatically stay enforcement.
(6) The Federal Court may order a temporary stay where necessary to prevent substantial and irreparable injustice.
(7) Nothing in this Part removes jurisdiction granted elsewhere by law.
2. Appeal Record
(1) Upon receiving notice of an appeal, the Banking Arbitration Office shall transmit the Arbitration Record to the Federal Court within twenty-four hours.
(2) The Arbitration Record shall include:
(a) The Arbitration Application;
(b) The Loan Agreement;
(c) The Arbitration Agreement;
(d) All evidence and submissions;
(e) Procedural orders;
(f) Any hearing record;
(g) The Arbitration Award;
(h) Any correction request; and
(i) Any conflict disclosure.
(3) The Department of Justice shall not alter or omit any material portion of the Arbitration Record.
3. Successful Appeal
(1) Where leave is granted, the Federal Court may:
(a) Affirm the Arbitration Award;
(b) Correct a legal, clerical, or mathematical error;
(c) Modify relief;
(d) Vacate the Arbitration Award; or
(e) Return the matter to the Banking Arbitrator with specific instructions.
(2) Where a matter is returned, the Banking Arbitrator shall issue a revised Arbitration Award within forty-eight hours unless the Federal Court permits additional time.
(3) The Federal Court should resolve the appeal on the existing Arbitration Record unless additional proceedings are necessary to prevent substantial injustice.
(4) The Banking Arbitration Office shall update the public register after the conclusion of an appeal.
PART VII — FUNDING AND ADMINISTRATION
1. Bank-Funded System
(1) An Eligible Financial Institution filing an Arbitration Application shall pay a filing fee to the Department of Justice.
(2) The filing fee shall not be paid directly to the Banking Arbitrator.
(3) Filing fees shall be used to fund:
(a) Banking Arbitrator compensation;
(b) Banking Arbitration Office expenses;
(c) Record keeping;
(d) Hearing expenses;
(e) Registration and enforcement expenses;
(f) Appeal-record preparation; and
(g) Reasonable reserves necessary to operate the system.
(4) Arbitration fees shall:
(a) Be paid exclusively by the Eligible Financial Institution;
(b) Not be charged to the Borrower;
(c) Not be included in the amount claimed;
(d) Not be recovered through an Arbitration Award; and
(e) Not depend upon which party prevails.
(5) Failure to pay the required filing fee shall result in rejection of the application without prejudice.
(6) Funds collected under this Act shall be separately recorded by the Department of Justice.
2. Fee Schedule
(1) The Attorney General shall publish a fee schedule.
(2) Before establishing or changing the fee schedule, the Attorney General may consult:
(a) The Department of Commerce;
(b) The Federal Reserve Bank;
(c) Eligible Financial Institutions;
(d) Banking Arbitrators; and
(e) Members of the public.
(3) The fee schedule may account for:
(a) Whether an application is uncontested or contested;
(b) Whether a hearing is required;
(c) Whether the dispute is designated complex;
(d) The administrative cost of the proceeding;
(e) The cost of enforcement assistance; and
(f) The compensation authorized under the Economic Standards Act.
(4) Fees shall not be calculated as a percentage of the amount awarded.
(5) A fee change shall not apply to an Arbitration Application filed before the change takes effect.
3. Compensation
(1) Banking Arbitrator compensation shall be established under the Economic Standards Act.
(2) Compensation may be calculated:
(a) Per completed application;
(b) Per hour for contested or complex proceedings;
(c) Through a fixed periodic payment funded by filing fees; or
(d) Through a combination of these methods.
(3) Compensation shall be paid by the Department of Justice.
(4) Compensation shall not depend upon:
(a) Which party prevails;
(b) The amount awarded;
(c) The number of awards issued in favor of Financial Institutions; or
(d) Whether an Arbitration Award is appealed, affirmed, modified, or vacated.
4. Records and Transparency
(1) The Department of Justice shall maintain records concerning:
(a) Applications filed;
(b) Applications rejected;
(c) Uncontested and contested proceedings;
(d) Arbitration Awards issued;
(e) Appeals filed;
(f) Arbitration Awards affirmed, modified, returned, or vacated;
(g) Enforcement requests;
(h) Average completion times;
(i) Fees collected;
(j) Compensation paid; and
(k) Complaints made against Banking Arbitrators.
(2) The Department of Justice shall publish an aggregate report at least once every three months.
(3) The report shall identify whether the system is meeting the following objectives:
(a) Uncontested Arbitration Awards issued within five days after filing;
(b) Contested Arbitration Awards issued within eight days after filing;
(c) Enforcement requests processed without unnecessary delay; and
(d) Appeal records transmitted within twenty-four hours.
(4) Personal financial information and confidential account information shall be redacted from public records.
(5) The Department of Justice shall not redact:
(a) The identity of the Banking Arbitrator;
(b) The identity of the Eligible Financial Institution;
(c) The final amount awarded;
(d) Whether the award was contested; or
(e) The result of any appeal,
unless another law requires redaction.
5. Rulemaking
(1) The Attorney General may publish regulations and standard forms necessary to administer this Act.
(2) Regulations may address:
(a) Electronic filing;
(b) Service;
(c) Evidence submission;
(d) Hearing procedures;
(e) Confidentiality and redaction;
(f) Standard calculation forms;
(g) Banking Arbitrator conduct;
(h) Temporary appointments;
(i) Application assignment;
(j) Administrative registration;
(k) Enforcement requests;
(l) Complaints and disciplinary procedures; and
(m) Record retention.
(3) Regulations may not:
(a) Prevent a Banking Arbitrator from issuing a binding Arbitration Award;
(b) Expand the Banking Arbitrator’s authority beyond this Act;
(c) Create general discovery;
(d) Create an automatic right to a hearing;
(e) Extend a statutory deadline except where expressly authorized;
(f) Expand the available relief beyond this Act;
(g) Require a Magistrate or Judicial Officer to confirm an Arbitration Award; or
(h) Require the Borrower to pay arbitration fees.
(4) Regulations issued under this section shall be publicly available.
PART VIII — STATUTORY AMENDMENTS
1. Contracts Act
(1) Section 11 of the Contracts Act shall be amended to read:
2. Credit Standards Act
(1) Section 4 of the Credit Standards Act shall be amended to read:
3. Judicial Standards Act
(1) Part VI, Section 1 of the Judicial Standards Act shall be amended to read:
4. Economic Standards Act
(1) Section 4(5)(a) of the Economic Standards Act shall be amended to read:
PART IX — GENERAL PROVISIONS
1. Non-Waivable Protections
(1) A Loan Agreement may provide protections greater than those established by this Act.
(2) A Loan Agreement may not waive or reduce:
(a) Notice requirements;
(b) Applicable cure periods;
(c) The right to respond;
(d) The right to present evidence;
(e) The impartiality requirements;
(f) The Eligible Financial Institution’s burden of proof;
(g) The right to appeal an Arbitration Award;
(h) Applicable appeal rights;
(i) Restrictions on arbitration and filing fees; or
(j) Restrictions on available relief.
2. Bankruptcy
(1) No Arbitration Application may be commenced or continued in violation of an automatic bankruptcy stay.
(2) No Arbitration Award may be enforced in violation of a bankruptcy stay.
(3) A proceeding may continue where the court administering the bankruptcy grants relief from the stay.
3. Abuse of Process
(1) An Eligible Financial Institution shall not use this Act to:
(a) Collect an amount it knows is not owed;
(b) Enforce an invalid or fraudulent Loan Agreement;
(c) Conceal payments;
(d) Claim unauthorized fees or interest;
(e) Harass a Borrower;
(f) Prevent consideration of a lawful defense; or
(g) Continue enforcement after an Arbitration Award has been satisfied.
(2) Where abuse is established, the Banking Arbitrator or Attorney General may:
(a) Dismiss the Arbitration Application;
(b) Deny improperly claimed amounts;
(c) Suspend enforcement;
(d) Refer suspected criminal conduct for investigation;
(e) Suspend the Eligible Financial Institution’s access to banking arbitration; or
(f) Revoke the Eligible Financial Institution’s access to banking arbitration.
(3) Before suspending or revoking access under subsection (2), the Attorney General shall provide the Eligible Financial Institution with:
(a) Written notice of the alleged abuse;
(b) A reasonable opportunity to respond; and
(c) A written decision.
(4) Suspension or revocation under this section shall not invalidate an Arbitration Award issued before the suspension or revocation unless that award was affected by the abuse.
4. Complaints Against Banking Arbitrators
(1) A party may submit a complaint concerning a Banking Arbitrator to the Attorney General.
(2) A complaint may concern:
(a) Bias;
(b) Conflict of interest;
(c) Improper communication;
(d) Failure to follow required procedure;
(e) Unreasonable delay;
(f) Abuse of authority; or
(g) Misconduct.
(3) A complaint shall not independently stay an Arbitration Application or enforcement.
(4) The Attorney General may order a temporary stay where necessary to prevent substantial injustice.
(5) The Attorney General may:
(a) Dismiss the complaint;
(b) Issue guidance or a warning;
(c) Reassign a pending application;
(d) Suspend the Banking Arbitrator;
(e) Remove the Banking Arbitrator; or
(f) Refer suspected criminal conduct for investigation.
(6) The complaint process shall not permit the Attorney General to alter a final Arbitration Award outside the correction or appeal procedures established by this Act.
5. Extensions
(1) A statutory deadline may be extended only where expressly authorized by this Act.
(2) An extension must:
(a) Be necessary to prevent material unfairness;
(b) Be no longer than reasonably required;
(c) Be issued in writing; and
(d) State the reason.
(3) The agreement of the parties shall not create an indefinite stay.
(4) The Banking Arbitrator may stay a proceeding for up to five days where both parties are actively negotiating settlement.
6. Severability
(1) If any provision of this Act is found invalid or unconstitutional, that provision shall be severed.
(2) The remaining provisions shall continue in force to the greatest extent permitted by law.
(3) If the authority of Banking Arbitrators to issue binding Arbitration Awards is found invalid, no Arbitration Agreement entered under this Act shall prevent either party from pursuing an ordinary court claim.
(4) If the appeal limitations are found invalid, the remaining arbitration provisions shall continue in force.
(5) If the Department of Justice’s enforcement authority is found invalid, a valid Arbitration Award may be enforced through any alternative procedure permitted by law.
7. Transitional Administration
(1) During the fourteen-day period before enactment:
(a) The Attorney General may appoint Banking Arbitrators;
(b) The Department of Justice may establish the Banking Arbitration Office;
(c) The Department of Justice may prepare regulations and standard forms;
(d) The Department of Justice may notify Eligible Financial Institutions;
(e) The Attorney General may establish the initial fee schedule; and
(f) The Department of Justice may establish registration and enforcement procedures.
(2) No Arbitration Application may be filed until:
(a) At least one Banking Arbitrator has been appointed;
(b) Standard filing and notice forms have been published;
(c) A fee schedule has taken effect; and
(d) Registration and enforcement procedures have been established.
8. Legislative Review
(1) The Department of Justice shall review this Act ninety days after enactment.
(2) The Department of Justice may consult the Department of Commerce, Federal Reserve Bank, Eligible Financial Institutions, Borrowers, attorneys, and other interested persons during the review.
(3) The review shall consider:
(a) Average completion times;
(b) Whether Banking Arbitrators provide adequate and impartial decision-making;
(c) The number of Arbitration Awards issued, appealed, affirmed, modified, returned, or vacated;
(d) Whether Borrowers receive adequate notice;
(e) Whether Eligible Financial Institutions accurately calculate debts;
(f) Whether fees sufficiently fund the system;
(g) The effectiveness of Department of Justice enforcement;
(h) The number and outcome of complaints against Banking Arbitrators;
(i) The number and outcome of appeals; and
(j) Whether further amendments are necessary.
(4) The Department of Justice shall submit the findings to Congress and make them publicly available.
Alexis_123003
Representative of 38th Congress