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Now Bank of America drops arbitration, appetites for bills whetted

After Minnesota Attorney General Lori Swanson sued and won a consent agreement with the National Arbitration Forum, the campaign against pre-dispute arbitration -- led by the trial bar and "consumer" activists -- continues to score successes. The latest, as reported by The Associated Press, "Bank of America drops arbitration requirement":

Bank of America Corp. said that as of Thursday it will stop requiring that disputes with its credit card holders and banking and lending customers be settled by binding arbitration, opening the door for class-action and other lawsuits to push up the bank's legal costs.

A statement from the American Association for Justice's associate director of federal relations, Julia Duncan:

While the decision by Bank of America to no longer rely on forced arbitration in consumer disputes is a positive step, it's clear that Congress must intervene to protect consumers. Forced arbitration clauses are buried in the fine print of everything from credit card and cell phone contracts to employee handbooks and nursing home agreements. These clauses eliminate Americans' access to the courts, forcing them instead into a private system set up by corporations to favor corporations. That is why Congress must pass the Arbitration Fairness Act and prohibit this abusive practice.

The bills to outlaw pre-dispute arbitration in consumer contracts are H.R. 1020, and S. 931, the Fairness in Arbitration Act.

More from Public Citizen, leader of the Fair Arbitration Now Coalition. By "fair" and "now" they mean "no more."

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.