Deposit Account Arbitration Agreements: Purpose, Strategy & Results

Arbitration provisions have become an increasingly important component of deposit account agreements, but simply inserting an arbitration provision into an account agreement does not necessarily provide the protection a financial institution expects. A well-designed arbitration agreement can provide an alternative forum for resolving accountholder disputes, reduce the cost and uncertainty associated with litigation, and significantly limit exposure to class and representative actions. But enforceability depends on much more than the words “binding arbitration.” Institutions must consider how the agreement is drafted, how accountholders receive and accept it, what claims it covers, whether accountholders have an opportunity to opt out, and how subsequent amendments are handled. The stakes become even higher when an institution wants to add an arbitration provision to existing accounts. This webinar will take a practical look at deposit account arbitration agreements – from deciding whether arbitration fits the institution’s litigation and risk management strategy through drafting, implementation, and enforcement.