Ruth Bader Ginsburg

California lawmakers want to rein in Wells Fargo's arbitration clause. But can they?

California lawmakers want to rein in Wells Fargo's arbitration clause. But can they?

Long before Wells Fargo & Co. admitted to opening potentially millions of unauthorized accounts, customers had noticed the bank’s practices and sued.

Well, they tried, but were turned away by judges citing unfavorable contractual language customers must agree to when doing business with the San Francisco bank.

Now, California lawmakers are working on a new law that could allow such cases to proceed.

But it’s possible that the state plan will run afoul of federal law — or be rejected by the U.S. Supreme Court.

Lawsuits stymied by arbitration

Customers who have tried to sue the bank have been turned away by courts because of arbitration clauses — language...

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