According to a recent Pew Charitable Trusts report, 90% of Americans have checking accounts, but "often are unaware of the terms of their checking account agreements." The report revealed the prevalence of dispute resolution clauses in such agreements.
Researchers examined checking account agreements from 85 banks and seven credit unions. They found that larger financial institutions were more likely to require checking account holders to agree to mandatory binding arbitration in the event of a dispute. The report defines such arbitration as "a private dispute resolution in which a third-party decision maker resolves disputes between opposing parties…the arbitration decision is binding with narrow opportunity to appeal." Out of the 50 largest financial institutions examined, 56% included mandatory arbitration clauses in their checking account agreements. Of the next 50 largest institutions, only 30% included such clauses.
The researchers also surveyed 603 consumers about their attitudes towards mandatory binding arbitration clauses. Approximately 90% of the consumers expressed concern about the mandatory binding arbitration process and more than two-thirds felt that, in the event of a dispute, they should be able to choose between arbitration and taking the matter to court.
