This case is a challenge under the Truth In Lending Act to Chase Bank’s former practice of raising interest rates on credit card accounts. The suit claims that Chase raised cardholders’ interest rates when cardholders missed a payment to Chase or any other creditor, but did not notify the cardholder that the rate had been increased. Moreover, Chase applied the new rate retroactively to the beginning of the billing period, meaning that purchases that had already been made were subject to the higher rate. McCoy won in the court of appeals, but Chase sought review in the U.S. Supreme Court.
Public Citizen Litigation Group was lead counsel for McCoy in the Supreme Court. On January 24, 2011, the Supreme Court ruled in favor of Chase. Under the Credit CARD Act, however, banks will now be required to provide 45 days’ advance notice of increased interest rates.