Banking Binding Arbitration in a Death Spiral |
Sunday, 16 August 2009 |
Bank of America Ends Arbitration Practice
The move, which comes amid a shakeout in the use of mandatory arbitration by big
U.S.
banks, means consumers will now be permitted to file lawsuits against Bank of America to resolve such disputes. Last month, two major organizations that preside over mandatory arbitrations said that they were pulling back from the business of using the process for collection matters......"We think arbitration is a very fair way to resolve the issue. A lot of our customers did not feel the same way, so we decided to make a change," said a Bank of America spokeswoman.
Bank of America Ends Arbitration Practice
Consumer Disputes Can Now Go to Courts; Rivals Like Citigroup Continue to 'Monitor Events'
BY ROBIN SIDEL
Bank of America Corp. said it is dropping a rule that forces customers into arbitration if they have a dispute about their credit-card or certain other consumer-related accounts.
The move, which comes amid a shakeout in the use of mandatory arbitration by big
U.S.
banks, means consumers will now be permitted to file lawsuits against Bank of America to resolve such disputes. Last month, two major organizations that preside over mandatory arbitrations said that they were pulling back from the business of using the process for collection matters.
Bank of America, based in
Charlotte
,
N.C.
, is the first major bank to announce that it is withdrawing from all mandatory arbitrations in consumer-related businesses. Other banks previously have said they are studying their policies.
In addition to credit-card disputes, Bank of America's decision applies to loans for automobiles, recreational vehicles and boats, as well as disputes about deposit accounts.
"We think arbitration is a very fair way to resolve the issue. A lot of our customers did not feel the same way, so we decided to make a change," said a Bank of America spokeswoman.
http://online.wsj.com/article/SB125019071289429913.html
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