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 settlement payment to settle the litigation begun in 2008.
In 2009, Bank of America had ceased enforcing a mandatory arbitration provision in its consumer credit-card agreements and hasn't used the National 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 those policies Bank of America already had in place.
