San Francisco's city attorney said Bank of America Corp. agreed to a $5 million settlement of a suit over its use of the National Arbitration Forum to handle credit card disputes.
In a statement, Bank of America said it and the city agreed to settle to avoid the costs and uncertainty of further legal action. It denied any liability or wrongdoing.
According to City Attorney Dennis Herrera, Bank of America's FIA Card Services NA unit would make a one-time $5 million payment to settle the litigation, which was brought in 2008.
Bank of America ceased enforcing a mandatory arbitration provision in its consumer credit card agreements in 2009, and it hasn't used the arbitration forum since then.
It also agreed to eliminate mandatory arbitration and class-action waiver provisions from its consumer and small-business credit card agreements.
Herrera said the settlement also secured cardholder protections, though many overlapped with B of A policies already in place.
