As part of a settlement agreement, JPMorgan Chase & Co. has become the second major credit card issuer to abandon mandatory arbitration, dealing another blow to the once-common industry practice, reports American Banker, a CardLine sister publication. Chase, the nation's largest card issuer, says it will remove the arbitration clauses from its credit card contracts effective during the first quarter of 2010. It's decision follows a similar one by Bank of America Corp., which said in August it would eliminate arbitration clauses from its card and other consumer contracts. "We believe our decision is the right thing for our customers and our business, and it reflects our commitment to clearer and simpler communication with our customers," Paul Hartwick, a Chase spokesperson, said in an e-mail Friday. Berger & Montague P.C. said Friday it had agreed to drop Chase from a long-running class-action lawsuit that alleged it and other issuers "unlawfully conspired to require their cardholders to arbitrate disputes." Under the terms of the settlement, Chase will drop its arbitration clause for 42 months, will not discuss arbitration with other issuers and will cover plaintiffs' attorney's fees. Chase's settlement does not affect the other defendants, which include Capital One Financial Corp., Citigroup Inc. and Discover Financial Services. In July, after two large arbitration firms said they would stop handling consumer debt-collection disputes, Chase said it had stopped filing consumer credit card arbitration claims and that it was reevaluating the inclusion of a mandatory arbitration clause in future consumer contracts. The New York-based company ultimately made its decision after spending the past few months looking "closely at this issue" and hearing "views from consumers and other interested parties," Hartwick says.