It’s been quite a good year for consumers complaining about hidden clauses in bank “agreements” that force all credit card and loan disputes into the extremely biased process known as “mandatory binding arbitration.” First, in March the U.S. Supreme Court made it easier for consumers to challenge these clauses in court. Then, in an incredible development precipitated by a lawsuit, both the National Arbitration Forum and American Arbitration Association said they would not take part in these credit card collection disputes - for now, at least.Now, the results of a four-year-old class action lawsuit against several huge banks are starting to bear major fruit, with the latest twist being that Bank of America Corp. earlier this week agreed to drop these clauses in consumer contracts – for a few years, at least.
The suit said the banks “conspired to require their card customers to resolve disputes in arbitration, including debt collections.”
While Bank of America’s agreement comes some four months after the bank voluntarily stopped enforcing arbitration agreements with existing customers, BoA’s recent settlement goes even further “by removing arbitration clauses from consumer and small business card holder agreements for at least three and a half years.”
Meanwhile, JPMorgan Chase & Co. brokered a similar deal last month. The remaining stubborn banking bigwigs (like Capital One and Citibank) continue their battle to keep the notoriously one-sided process in place.
Guess some banking “dinosaurs” never learn.