Credit card rate notices
Chase Bank USA v. McCoy
In brief
The Supreme Court overturned the appeals court: Chase did not have to send McCoy a new notice before applying the already-disclosed default-rate term in the transactions at issue.
- Where it stands
- Decided
Decided 9-0 · January 24, 2011 · Opinion by Justice Sotomayor
- What it’s about
- The Supreme Court ruled that Regulation Z did not require Chase to notify cardholder McCoy before raising his interest rate under a previously disclosed agreement term, up to a set maximum, after delinquency or default.
- Who it affects
- For the transactions before the Court, Chase did not have to give McCoy a new notice before applying the previously disclosed default-rate term, up to its stated maximum, after delinquency or default.
Summary: written with AI from the case record.
What it's about
It overturned the appeals court’s ruling and sent the case back to that court (remanded).
Regulation Z is part of the federal Truth in Lending Act. The case asked what notice a bank must give when it applies a credit-card agreement’s disclosed default-rate term.
Question presented
When a creditor increases the periodic rate on a credit card account in response to cardholder default, but pursuant to a default rate term disclosed in the contract governing the account, does Regulation Z of TILA require the creditor to provide the cardholder with a change-in-terms notice?
What the Court decided
Holding
At the time of the transactions at issue, Regulation Z did not require Chase to provide McCoy with a change-in-terms notice before implementing the agreement term allowing it to raise his interest rate, up to a pre-set maximum, following delinquency or default. 559 F. 3d 963, reversed and remanded.
- Result
- Reversed
The Court's reasoning
The Court said Regulation Z did not require another notice when Chase used a default-rate term already disclosed in McCoy’s agreement, for the transactions at issue.
The vote
What's next
The case goes back to the appeals court for further proceedings.
Documents
Opinions
Audio
Docket activity
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AI analysis generated: Impact Analysis
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AI analysis generated: Case Briefing
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AI analysis generated: Decision Record
Case data updated: summary, question_presented, generation_metadata
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Audio Recording added: Oral Arguments - McCoy
Opinion added: McCoy
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.