Citizens Bank now says it's reviewing mandatory arbitration clauses in credit card contracts.

Some banks may review their use of arbitration to compete with their peers, says Scott Talbott, senior vice president of the Financial Services Roundtable, which represents large banks. 'If banks know they won't be shielded by arbitration, it will lead to fairer (product) terms.' 'This is a major victory for consumers,' says Ed Mierzwinski, consumer program director at the U.S. That means customers can now sue the bank rather than having the dispute handled by a former judge or legal expert behind closed doors. BofA's move is broader because it will no longer require mandatory arbitration for banking and loan customers. Since then, a growing number of dispute-resolution firms and credit card companies have backed away from arbitration.Ĭhase last month said it would no longer file new arbitration claims on consumer credit card disputes. Last month, Minnesota Attorney General Lori Swanson sued a major dispute-resolution firm, National Arbitration Forum, charging that it hid its ties to the debt-collection industry. The change comes as mandatory arbitration clauses - common in credit card, cellphone and, increasingly, employment contracts - come under fire from regulators and Congress. — - In the industry's latest shift away from controversial forced arbitration clauses, Bank of America said Thursday that it will no longer require credit card, bank account and auto loan customers to sign away their right to sue.

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