ORLANDO, Fla. – Key Update:
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Bank of America is altering its approach to managing disputes related to online and mobile banking.
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The bank is shifting many forthcoming disputes away from the courtroom and toward private arbitration.
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Customers will be automatically enrolled in this new process, but they have a 60-day window to opt out if desired.
If you are a Bank of America customer, take note: The nation’s second-largest bank is implementing a change that could have a substantial impact on your legal rights when handling disputes tied to online banking.
Starting May 18, Bank of America will enforce a new arbitration clause within its Online Banking Service Agreement. This provision, affecting numerous personal banking account holders, outlines how future disagreements will be addressed.
In a nutshell, here’s what customers should know:
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If you have a disagreement related to your online or mobile bank account at Bank of America, the bank can now require the dispute to go through arbitration instead of through the traditional court system.
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Because of this change, customers generally waive the right to:
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Unless customers actively opt out, the clause automatically becomes part of their service agreement with Bank of America.
Bank of America’s full arbitration document can be found here.
Why This Matters
Legal experts say arbitration can significantly limit a customer’s options if they have a dispute with their bank.
Unlike traditional lawsuits, arbitration proceedings are typically handled privately by a third-party arbitrator instead of a judge or jury.
Also, decisions often remain confidential, and customers generally cannot join together in class-action lawsuits.
“By participating in arbitration, you’re generally waiving your right to in-court hearings, which means no judge and no jury,” says Morgan Cardinal, Director of Advocacy at the Community Legal Services of Mid-Florida. “They advertise these things as moving quicker than the justice system, which by and large is probably true, but the benefit of our justice system is that it’s out in the open and everybody can see what has gone on and everybody benefits from that decision going forward.”
Consumer advocates say the policy becomes especially significant when disputes involve relatively small amounts of money (i.e. overdraft fees, duplicate ATM charges, or disputed banking fees), because individual customers may be less likely to pursue claims on their own.
Also, one of the biggest differences between arbitration and traditional litigation is transparency. Court filings, hearings, and rulings generally become part of the public record, while arbitration proceedings are often conducted privately.
“Because it’s a private opportunity at resolution, it’s hard to know how systemic issues or repeated issues are being addressed in a private resolution,” Cardinal added. “Whereas in the court system, it’s all public, so we can see if those fees are deemed illegal or inappropriate by the court.”
In a letter to Bank of America CEO Brian Moynihan, a coalition of 25 consumer advocacy and public interest organizations called the bank’s decision to force arbitration on its customers “rigged” and urged Bank of America to “reinstate customers’ right to choose to go to court when disputes arise.”
“Bank of America should immediately remove the arbitration clause from any of its contracts with consumers,” said Patrick Crotty, senior attorney at the National Consumer Law Center.
When we reached out to Bank of America, the company declined to comment on this story.
What you need to know
On its website, Bank of America states customers will primarily be notified of the changes by email, messages inside the online banking mobile app inboxes, or through updated account agreement disclosures.
Bank of America has also stated on its website that customers can opt out of the modified agreement within “60 days of first delivery of this Arbitration provision.” Some customers may have already received their notice – one arbitration/change of terms email reviewed by WKMG had a send date of March 25, 2026, while another was dated March 31, 2026.
Customers have two options to opt out:
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Click here (you’ll need your online banking ID and password). Once there, it is as simple as clicking the “Submit” button.
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Call Bank of America at 800-238-8875.
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Customers who are logged into Bank of America’s online banking portal will NOT find the opt-out option page when searching inside “Help & Support”.
Multiple searches conducted by WKMG of Bank of America’s online banking support tools – including searches for “arbitration” and “opt-out” – did not immediately surface information explaining how customers could review or reject the new policy. A search of the word arbitration also turned up no results on the bank’s site map page.
Bank of America’s 32-page web-based Online Banking Service Agreement addresses the new arbitration clause at the top of the document, but doesn’t address how a customer can opt out until page 30.
Again, customers who do not opt out within the deadline window will automatically be considered enrolled in the new policy.
Back to the future
Bank of America had previously stepped back from mandatory arbitration provisions following legal and political scrutiny that started more than two decades ago.
In the 1990s, banks aggressively embraced arbitration, especially in the areas of credit cards, checking accounts, overdraft agreements, and (in the very early days of) online banking services. Their argument: arbitration was faster, cheaper, and more efficient than litigation in the courts.
Things, however, changed dramatically during the first decade of the 2000s when there was a surge of public scrutiny over foreclosure practices and deceptive disclosures. A major turning point came in 2005, when many of the biggest names in banking were named in a federal antitrust lawsuit. According to the lawsuit, the banks – including Bank of America, Capital One, Citibank, Discover, HSBC, and JPMorgan Chase – were accused of colluding to adopt mandatory arbitration clauses that blocked consumers from joining class-action lawsuits.
In 2010, Bank of America, Capital One, HSBC, and JPMorgan Chase reached an early settlement and agreed to stop enforcing arbitration clauses and class-action bans for certain consumer and small business credit card customers. Discover was later settled in 2011; Citibank was settled in 2012.
But the broader fight over arbitration did not end there.
Following years of study after the financial crisis, the Consumer Financial Protection Bureau concluded that many consumers were effectively blocked from pursuing claims because arbitration clauses often prevented class-action lawsuits. Class-action lawsuits allow groups of consumers with relatively small individual claims to combine cases into a single larger lawsuit.
On July 10, 2017, the CFPB issued a final rule regulating arbitration agreements in specific consumer financial contracts. The CFPB’s lengthy 775-page rule stated that although financial companies could require arbitration, they could no longer use arbitration clauses to block consumers from participating in class-action lawsuits.
The final rule wasn’t final for very long.
Shortly after the new CFPB publication, Congress voted to overturn the rule. On November 1, 2017, President Donald Trump signed off on repealing the CFPB guidelines, effectively preserving banks’ ability to use arbitration clauses that restrict class-action lawsuits.
Bank of America’s updated policy may not represent a new industry trend so much as the bank catching up with competitors that had already returned to arbitration agreements years earlier. JPMorgan Chase, for example, reintroduced mandatory arbitration clauses in certain consumer agreements back in 2019 after previously abandoning them following the banking industry’s arbitration controversy more than a decade earlier.
Arbitration clauses remain widespread throughout the financial industry. One 2023 study examining the nation’s 20 largest credit card issuers found roughly 85% used forced arbitration clauses in their customer agreements. The study found only three major issuers – Capital One, TD Bank, and Bank of America – did not include forced arbitration clauses in their terms of service at the time.
Arbitration is a private legal process used to resolve disputes outside the traditional court system. Supporters say it can be faster and less expensive than litigation, while critics argue it can limit consumers’ legal options.
Consumer advocates say customers should carefully read the updated terms and understand how the changes could affect their legal rights before deciding whether to remain enrolled. Legal experts note that arbitration can sometimes resolve disputes more quickly than traditional litigation, though critics argue consumers may give up important legal protections in the process.
For now, the most important thing for Bank of America customers may simply be awareness. Some customers may welcome a fast-track arbitration process – some may want to keep options open to settle disputes through the courts.
Unless customers actively opt out within the required timeframe, the arbitration clause will generally become part of their online banking agreement automatically.
