Three Democratic lawmakers are pressing Bank of America to scrap a forced arbitration provision the bank quietly added to its online banking terms, reviving a long-running fight over consumers’ ability to take financial institutions to court.
In a letter sent last week to Chief Executive Brian Moynihan, Sen. Richard Blumenthal [D-Conn.] and Sen. Elizabeth Warren [D-Mass.] of Massachusetts, joined by Rep. Hank Johnson [D-Ga.] , called on the bank to immediately remove the clause and restore what they described as basic consumer protection principles. The provision took effect May 18 and requires customers to resolve nearly every dispute with the bank through private arbitration, denying them the right to a jury trial or participation in class-action lawsuits. The agreement gives customers 60 days to opt out, a window the lawmakers warned will lapse before most account holders realize anything has changed.
The shift marks a notable reversal for the bank. Bank of America abandoned arbitration clauses in credit card disputes in 2009, a decision that followed litigation alleging it colluded with other banks to impose such provisions. That posture held for nearly 17 years. As recently as 2017, in response to an earlier inquiry from Warren, the bank described dropping arbitration as the right business practice for maintaining relationships with its clients and customers.
The lawmakers argued the new terms push customers into a closed process tilted against them. “During the arbitration process, corporations can write the rules and have no obligation to make proceedings public,” they wrote, adding that limited discovery makes it harder for consumers to build a case and that binding decisions leave little room for appeal.
The letter poses five questions, asking why the bank changed course, whether it analyzed the effect on customers, whether it conducted internal reviews, whether it projected cost savings, and whether it will commit to reassessing the policy.
