WASHINGTON — The Supreme Court asked the Obama administration Monday for its views on Chase Bank's legal challenge to a ruling that said the company could be sued for changing credit-card interest rates without written notice for account holders who were late on payments.
At issue is a March 2009 decision by a California federal appeals court that revived a 2006 class-action lawsuit against the bank, a subsidiary of JPMorgan Chase & Co.
Chase argued that federal law at the time of the lawsuit did not require banks to give notice of rate changes to card holders who were late on payments. The bank said the initial contracts given to card holders already contained explicit provisions that allowed for the hiking of interest rates for borrowers in default.
The justices, in a brief written order, asked the U.S. solicitor general, the government's lawyer at the Supreme Court, to weigh in on whether the court should consider Chase's arguments.
The Federal Reserve Board amended the relevant law last year, requiring banks to give card holders 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.
