As part of a tentative settlement agreement in a long-running lawsuit, Bank of America Corp. has agreed to drop the mandatory-arbitration clauses and class-action bans from all of its consumer and small-business credit card agreements beginning next year, the law firm Berger & Montague PC in Philadelphia said.
B of A, of Charlotte, said in August that it was ending its mandatory-arbitration policy. The settlement calls for the issuer to eliminate all arbitration clauses beginning in May through at least late 2013. B of A also agreed as part of the settlement to stop enforcing its existing arbitration clauses against cardholders. The moves were announced Wednesday.
JPMorgan Chase & Co., which last month reached a similar agreement in the same lawsuit, also said it plans to end mandatory arbitration. Neither company admitted any wrongdoing.
Several other issuers — including Capital One Financial Corp., Citigroup Inc., Discover Financial Services, HSBC North America Holdings Inc. — remain defendants in the 2005 case.