SAN FRANCISCO -- A California court has dismissed a challenge to BankAmerica Corp.'s mandatory arbitration policy in disputes with consumers, one of the banking industry's most aggressive programs for reining in legal costs.

In an oral decision issued last Thursday, San Francisco Superior Court Judge Thomas Mellon Jr. ruled that BankAmerica had not been unfair or deceptive in requiting its 12 million California credit card and deposit customers to accept arbitration.

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