JPMorgan Wins at U.S. High Court in Credit-Card Case

Jan. 24 (Bloomberg) -- The U.S. Supreme Court, ruling in favor of a JPMorgan Chase & Co. unit, shielded banks from some lawsuits by credit-card consumers whose interest rates were increased after they went into default.

The justices today unanimously said that a since-changed Federal Reserve Board regulation let Chase Bank USA raise James A. McCoy’s interest rates without notifying him. Chase’s cardholder agreement said the company could impose higher rates in the event of a default.

In siding with Chase, the court said it was deferring to the Fed’s interpretation of the rule, known as Regulation Z. Although the Fed changed the regulation in 2009 to require notification to defaulting customers, the Obama administration argued that companies before then didn’t have to provide notice.

“Because the interpretation the board presents in its brief is consistent with the regulatory text, we need look no further in deciding this case,” Justice Sonia Sotomayor wrote for the court.

The San Francisco-based 9th U.S. Circuit Court of Appeals had ruled against Chase in a decision that led to similar suits being filed in California against other banks.

Regulation Z implements a consumer-protection provision in the U.S. Truth in Lending Act.

The case is Chase Bank v. McCoy, 09-329.

To contact the reporter on this story: Greg Stohr in Washington at

To contact the editor responsible for this story: Mark Silva at