Bank Of America Settlement Includes Innovative No-Arbitration Clause

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After the Supreme Court’s AT&T v. Concepcion decision, it is hardly surprising to see courts enforcing arbitration clauses between plaintiffs and banks, employers, or retailers.  However, novel methods to avoid arbitration clauses and class action waivers are also emerging.  As part of a recent settlement between the San Francisco City Attorney and a Bank of America subsidiary, the financial institution agreed not to insert mandatory class action waivers into consumer contracts for credit cards.  See Settlement Agreement, People v. Nat’l Arbitration Forum, No. 473-569 (S.F. Super. Ct. Aug. 18, 2011).  Further, FIA Card Services agreed to not arbitrate collections disputes with California consumers for two years, and to stop using the notoriously anti-consumer National Arbitration Forum for five years.  The settlement also secures $5 million for San Francisco city taxpayers.