The Supreme Court, taking on a case affecting the rights of credit card customers, agreed yesterday to settle banks’ duty to give advance notice before raising the interest rate they will charge when a card user defaults on a payment, according to a SCOTUS Blog analysis. The Court granted certiorari despite the advice of the federal government that the case should be returned to lower courts to consider the Federal Reserve’s views. The government suggested that the case had little continuing importance, but bank card-issuers disagreed. A series of lawsuits, aimed at perhaps half of the entire credit card industry, followed a Ninth Circuit ruling that a customer had to be notified in advance if a card issuer was going to raise a rate due to delinquency or default — even though the contract with the issuer already had indicated that such a change would follow. Chase Bank USA (now a part of JPMorgan Chase & Co.) took the case on to the Supreme Court, saying that it was already clear that the Federal Reserve did not require any such notice. (In 2009, the Fed, later backed by a new law from Congress, imposed a 45-day advance notice requirement before implementing a default rate increase, but that only applies to increases that would go into effect after last August, and not the ones at issue in Chase Bank USA v. McCoy, et al., 09-329.) The case will be heard and decided in the term starting Oct. 4.
http://www.scotusblog.com/2010/06/credit-card-holders-rights/
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