* JPMorgan says drops mandatory arbitration

* Bank resolves its portion of antitrust lawsuit

By Jonathan Stempel

NEW YORK, Nov 20 (Reuters) - JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) on Friday said its credit card contracts will no longer require customers to resolve disputes through arbitration, a practice that critics view as unfriendly to consumers.

The second-largest U.S. bank announced the decision three months after a similar move by Bank of America Corp (BAC.N: Quote, Profile, Research), the largest bank. [ID:nN13261195]

"Our decision is the right thing for our customers and our business and reflects our commitment to clearer and simpler communication with our customers," JPMorgan spokesman Paul Hartwick said in an e-mail.

JPMorgan stopped sending credit card disputes to arbitration in July, he added.

Critics of mandatory arbitration say the process is biased toward card issuers, and also hurts consumers who do not realize they are waiving their right to sue when they accept card services. The decision could clear the way for more cardholders to file lawsuits against the New York-based bank.

Supporters of arbitration in contrast say the process can be faster and less costly than going to court, which could result in extra costs that could be passed on to consumers.