A good first step.

We witness instances of true bipartisanship in Washington about as frequently as we see Halley's Comet. So when Republicans and Democrats combine to achieve something positive that might ultimately benefit all the nation's consumers, kind words are warranted.

The 109th Congress lodged few notable achievements before adjourning with a whimper in December. But lawmakers managed to pass at least one piece of legislation that should benefit American consumers. The new House and Senate, dramatically different from their predecessors as a result of the November elections, might prove capable of making even greater strides.

You may be familiar with the problem of payday lenders, particularly if you reside or practice near a military base. A report recently released by the Department of Defense notes that predatory lenders target young servicemembers, who often possess little savings or flawed credit. These companies loan military personnel money at exorbitant interest rates--exceeding 400 percent in some instances--and encourage them to make costly extensions when payments lag, a frequent occurrence.

Then-Sen. James Talent (R-Mo.) and Sen. Bill Nelson (D-Fla.) responded by inserting a provision in the defense authorization bill signed by President Bush that capped the interest on loans provided to military personnel at 36 percent. The new law also prohibits mandatory arbitration provisions in payday loan agreements with servicemembers.

Mandatory arbitration is an insidious practice foisted on unwary consumers. It prohibits consumers from holding wrongdoers accountable in the nation's courts. Cases are instead channeled to a costly private system that favors companies empowered to select their own, often business-friendly, arbitrators, who are not bound by legal precedent or even common decency. And their rulings usually can't be appealed.

Individuals bound by payday loans and similar agreements often don't realize they have brokered away their constitutional rights. Mandatory arbitration language often is buried so deep in a contract that it escapes notice. Congress and the Bush administration have taken a necessary step to halt this abuse.

But it's a tiny step that begs the question: If mandatory arbitration provisions are bad for military personnel, why aren't they bad for every American? The answer is simple: They are bad for everyone. Mandatory arbitration hurts all consumers because it eliminates their right to hold wrongdoers accountable.

Broader protections needed

No longer able to prey on servicemembers, payday lenders undoubtedly will begin searching for other marks, doubling their efforts to entrap the working poor--those living paycheck to paycheck--who are faced with a financial emergency. These Americans remain unprotected.

And payday lenders aren't alone in taking advantage of consumers through the use of mandatory arbitration. Giant corporations increasingly are inserting these clauses into contracts--from credit card agreements to pest control contracts to home construction pacts. Many employers, too, are requiring their workers to agree to mandatory arbitration of employment disputes. All these provisions benefit the corporate bottom line at the expense of consumers' well-being and constitutional rights.

The companies often create the arbitration rules without input from consumers and usually include clauses that impede public knowledge of the proceedings and limit the evidence the aggrieved party can present. And it usually costs a consumer more to go to arbitration than it would to pursue a complaint in civil court.

Corporations that favor mandatory arbitration provisions claim they are simply a private-sector alternative to the courts that streamline the dispute process and control costs. But a system that empowers one of two opposing sides to select the judge and make the rules falls far short of anything recognizable as justice.

Congress had recognized problems with mandatory arbitration before but had failed to act to protect consumers. Even before adopting the Talent-Nelson amendment, lawmakers in 2002 passed the Motor Vehicle Franchise Contract Arbitration Fairness Act, which prohibits mandatory arbitration clauses in agreements between automakers and franchise sellers. So dealers can now sue Ford, GM, and others if they feel they've been cheated. But efforts to prohibit these provisions in consumer contracts failed, leaving car buyers at an obvious disadvantage.

The Talent-Nelson amendment, as welcome as it is, will have only limited impact unless it leads to a broader discussion about the negative influence mandatory arbitration has on the public at large. A prohibition on mandatory arbitration provisions in all consumer contracts would be a monumental contribution to consumer justice. The American Association for Justice will work with the new Congress to build on and extend similar protections to all consumers.

LEWIS S. "MIKE" EIDSON