WASHINGTON — The Supreme Court on Monday agreed to consider whether Chase Bank USA can be sued for changing credit-card interest rates without written notice for account holders who were late on payments.
The bank, a subsidiary of JPMorgan Chase & Co., is asking the court to overturn a lower court decision in California that revived a 2006 class-action lawsuit against the company.
Chase argued that federal law at the time of the lawsuit did not require banks to give notice of rate changes to cardholders who were late on payments. The bank said the initial contracts given to cardholders already contained explicit provisions that allowed the raising of interest rates for borrowers in default.
The Federal Reserve Board implemented a change to the law last year that required banks to give cardholders advance notice of rate increases due to default, even if the default rate was already specified in the original contract.
The case is Chase Bank USA v. McCoy, 09-329. Oral arguments in the case will take place during the court's next term, which begins in October.