Banks Urged Supreme Court to Validate Arbitration Clauses
The American Bankers Association argued that notice and continued account use should constitute acceptance of new terms.
Updated on Sept. 30, 2026 in Banking
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The American Bankers Association filed an amicus brief urging the Mississippi Supreme Court to allow banks to modify arbitration clauses via customer notice. The move comes as the court reviews a case involving Robert Fuller, who sued Cadence Bank after losing $1.18 million in a wire transfer scam.
Why it matters
Banks contend that requiring a physical signature for every minor change to deposit agreements is operationally impractical and inconsistent with the Federal Arbitration Act. A ruling against the banks could force institutions to alter their standard notification procedures across the state.
Robert Fuller claims a loss of $1.18 million regarding four wire transfers and is seeking $10 million in damages. The litigation follows the bank's 2021 update to account terms and the plaintiff's subsequent signing of four wire transfer forms in June 2024.
The players
American Bankers Association
This is the primary trade organization for the banking industry in the United States.
Robert Fuller
He is the plaintiff who filed a lawsuit against Cadence Bank after experiencing a financial loss from wire transfers.
Cadence Bank
This financial institution is the defendant in a lawsuit involving contested wire transfer terms.
Grady Tollison
He serves as a judge in the Circuit Court of Union County and presided over the initial motion to compel arbitration.
The details
Judge Grady Tollison of the Circuit Court of Union County initially compelled arbitration, ruling that the plaintiff accepted terms through notice and continued account use. The American Bankers Association and the Mississippi Bankers Association now argue that state law should not single out arbitration clauses for stricter formation requirements.
Timeline
BancorpSouth issued new account terms to Robert Fuller in 2021.
Fuller signed four wire transfer forms in June 2024.
Robert Fuller initiated a lawsuit against Cadence Bank in 2025.
The legal issue was assigned for review by August 28, 2026.
Market Dynamics
This case tests the viability of established deposit agreements against evolving state standards for contract formation. It directly challenges the precedent set by Union Planters Bank, N.A. v. Rogers regarding whether notice and continued account use are sufficient for arbitration enforcement.
Bank customers in Mississippi should review their current deposit agreements to understand how changes are communicated by their financial institutions. A final ruling could affect whether consumers retain the right to sue banks in court or are restricted to binding arbitration.
The takeaway
The court's decision will determine the future enforceability of arbitration clauses added via account usage notices. Account holders should be aware that continuing to use services after receiving an update notice often carries legal weight regarding their ability to seek litigation.
Further reading
Learn more about industry regulations on the Mississippi Banking page.
Source note: This article includes information reported by ABA Banking Journal.
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