My Way News - Oregon couple win credit risk ruling against Chase
Mostly quoting from this really nice and well organized news site but I don't care for it's hokey name "My Way News." I like the way it gathers, compiles, and organizes the news and the major press and media sources it uses. Unlike Google or other news compiler sites, "My Way" claims there are ZERO banner, pop up ads, and the like congesting the site.
(I think the AP was the source of this story) "In a legal victory for consumers, a federal appeals court has ruled that Chase Bank must clearly disclose that it can raise the annual percentage rates for cardholders based on credit risk. The 9th U.S. Circuit Court of Appeals ruled in favor of an Oregon couple who claimed that Chase violated the Truth in Lending Act, reversing a lower court ruling that had dismissed their complaint. Bottom line, from what I gleaned in this brief article I wouldn't call this a victory just because these parties "prevailed" against the bank. It was a win because the language explaining what the bank could do with the rates were inadequate to alert the reasonable consumer of the bank's ability to raise interest rates whenever it wants to, otherwise the parties would have lost the case. It's basically a finding that "notice" was unreasonable and insufficient as opposed to the rate itself being unconscionable or usurious. This is actually not a ruling one should pronounce as a "legal victory. For me the bank wouldhave had to find the actions the bank wants to take is wrong even with notice. That wasn't the case. On the other hand, I suppose that the consumer so so so rarely if ever prevails against the creditor that any win whatsoever is a headline. How sad is that. Usually it's a couple of questions and that's the case - did you pay the bill, No, Case over. Consumer loses. There are rarely any defenses, this notice issue allowed the judges to give the consumer a win. It was discretionary to the court and the court went for it in an unusual way. (remember the same attorney may be in there every day with 20 lawsuits one after the other. the judge gets used to the attorney, friendly, and the attorney just keeps winning each case one after another. That's the reality of the courthouse))
Cheryl and Walter Barrer filed a class-action lawsuit against the bank after it nearly tripled the annual percentage rate - or APR - on their credit card from about 9 percent to more than 24 percent in April 2005. The couple claimed that Chase violated the act by failing to disclose the criteria it used to raise the rate, including the risk factors involved. The court noted that Chase cited general reasons that included outstanding loans it deemed 'too high' and too many recently opened credit accounts." The Court found that Chase owed a duty to its customers/cardholders to "clearly and conspicuously" disclose that it could change interest rates "for any reason at all." Such disclosures, he added, must be made in a way "that a reasonable cardholder would notice and understand." The Court found that Chase breached that duty. Judge Susan Graber was even more critical of the bank in a dissenting opinion that concurred with the majority in part. Graber said allowing the bank to change the rate for any reason so long as it clearly disclosed that it reserved that right could lead to "bizarre and unexpected" results.
This ruling was not related to nor did it mention the new credit card and lender rules signed into law by President Obama some weeks ago, however, the atmosphere in the country is clearly in favor of promoting consumer protection. Some judges on the panel expressed dismay that the curt did not go further in its opinion in regulating the rates. (See Judge Graber's comments above)
The new law goes into effect in or about the month of March, 2010. According to the My Way article the law is "designed to protect debt-ridden consumers from surprise charges. He criticized policies that allowed for confusing fine print; the sudden appearance of unexplained fees on bills; unannounced shifts in payment deadlines, interest charges or rate increases even when payments aren't late; and payments directed to balances with the lowest interest rates rather than the highest. The new credit card rules, which go into effect in nine months, prohibit companies from giving cards to people under 21 unless they can prove they have the means to pay the debt or a parent or guardian co-signs. A customer also will have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender will be required to restore the previous, lower rate if the cardholder pays the minimum balance on time for six months."..."...consumers also will have to receive 45 days' notice and an explanation before their interest rates increase."
Many laws contain a notice provision and sometimes the law will specify how the provision must be worded, the minimum font size, bold or not, and so on. Off the top of my mind, some of Florida's insurance laws related to informed waivers of coverage, those being the uninsured motorist coverage or personal injury protection (PIP) laws are very specific as to notice and how any waiver or acceptance must be executed. In those cases the failure to follow the exact requirements or in other words should there be any deviation as to the requisite form on the part of the document drafter is a lose for it or win for the consumer. For example, if the law requires the creditor to use font size 14 in it's notice provision for raising interest rates and the consumer shows the actual font size used was 13 then the consumer wins. I believe it would be a violation even if the party admits to reading it. Nothing prevents states from enacting laws using the same type of requirements regarding consumer financial rights of other types of kinds e.g. health or medical benefits, insurances of all kinds, . Now that would be the way to go on these notices but that it not the job of the court, that would be a function delegated to the legislature of the particular state. But the real issue is not notice it's the rate charged.
Many times the court will include a footnote or sentence in its written opinion stating the court would like to do this or that is but the law is lacking and thus the court is without power. The opinion will state something to the effect that the state legislature may wish to consider amending the law in a manner consistent with the opinion so the curt can in the future "do justice" or grant relief. These court opinions are sent over to the proper person or committee designated to handle them.
(I think the AP was the source of this story) "In a legal victory for consumers, a federal appeals court has ruled that Chase Bank must clearly disclose that it can raise the annual percentage rates for cardholders based on credit risk. The 9th U.S. Circuit Court of Appeals ruled in favor of an Oregon couple who claimed that Chase violated the Truth in Lending Act, reversing a lower court ruling that had dismissed their complaint. Bottom line, from what I gleaned in this brief article I wouldn't call this a victory just because these parties "prevailed" against the bank. It was a win because the language explaining what the bank could do with the rates were inadequate to alert the reasonable consumer of the bank's ability to raise interest rates whenever it wants to, otherwise the parties would have lost the case. It's basically a finding that "notice" was unreasonable and insufficient as opposed to the rate itself being unconscionable or usurious. This is actually not a ruling one should pronounce as a "legal victory. For me the bank wouldhave had to find the actions the bank wants to take is wrong even with notice. That wasn't the case. On the other hand, I suppose that the consumer so so so rarely if ever prevails against the creditor that any win whatsoever is a headline. How sad is that. Usually it's a couple of questions and that's the case - did you pay the bill, No, Case over. Consumer loses. There are rarely any defenses, this notice issue allowed the judges to give the consumer a win. It was discretionary to the court and the court went for it in an unusual way. (remember the same attorney may be in there every day with 20 lawsuits one after the other. the judge gets used to the attorney, friendly, and the attorney just keeps winning each case one after another. That's the reality of the courthouse))
Cheryl and Walter Barrer filed a class-action lawsuit against the bank after it nearly tripled the annual percentage rate - or APR - on their credit card from about 9 percent to more than 24 percent in April 2005. The couple claimed that Chase violated the act by failing to disclose the criteria it used to raise the rate, including the risk factors involved. The court noted that Chase cited general reasons that included outstanding loans it deemed 'too high' and too many recently opened credit accounts." The Court found that Chase owed a duty to its customers/cardholders to "clearly and conspicuously" disclose that it could change interest rates "for any reason at all." Such disclosures, he added, must be made in a way "that a reasonable cardholder would notice and understand." The Court found that Chase breached that duty. Judge Susan Graber was even more critical of the bank in a dissenting opinion that concurred with the majority in part. Graber said allowing the bank to change the rate for any reason so long as it clearly disclosed that it reserved that right could lead to "bizarre and unexpected" results.
This ruling was not related to nor did it mention the new credit card and lender rules signed into law by President Obama some weeks ago, however, the atmosphere in the country is clearly in favor of promoting consumer protection. Some judges on the panel expressed dismay that the curt did not go further in its opinion in regulating the rates. (See Judge Graber's comments above)
The new law goes into effect in or about the month of March, 2010. According to the My Way article the law is "designed to protect debt-ridden consumers from surprise charges. He criticized policies that allowed for confusing fine print; the sudden appearance of unexplained fees on bills; unannounced shifts in payment deadlines, interest charges or rate increases even when payments aren't late; and payments directed to balances with the lowest interest rates rather than the highest. The new credit card rules, which go into effect in nine months, prohibit companies from giving cards to people under 21 unless they can prove they have the means to pay the debt or a parent or guardian co-signs. A customer also will have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender will be required to restore the previous, lower rate if the cardholder pays the minimum balance on time for six months."..."...consumers also will have to receive 45 days' notice and an explanation before their interest rates increase."
Many laws contain a notice provision and sometimes the law will specify how the provision must be worded, the minimum font size, bold or not, and so on. Off the top of my mind, some of Florida's insurance laws related to informed waivers of coverage, those being the uninsured motorist coverage or personal injury protection (PIP) laws are very specific as to notice and how any waiver or acceptance must be executed. In those cases the failure to follow the exact requirements or in other words should there be any deviation as to the requisite form on the part of the document drafter is a lose for it or win for the consumer. For example, if the law requires the creditor to use font size 14 in it's notice provision for raising interest rates and the consumer shows the actual font size used was 13 then the consumer wins. I believe it would be a violation even if the party admits to reading it. Nothing prevents states from enacting laws using the same type of requirements regarding consumer financial rights of other types of kinds e.g. health or medical benefits, insurances of all kinds, . Now that would be the way to go on these notices but that it not the job of the court, that would be a function delegated to the legislature of the particular state. But the real issue is not notice it's the rate charged.
Many times the court will include a footnote or sentence in its written opinion stating the court would like to do this or that is but the law is lacking and thus the court is without power. The opinion will state something to the effect that the state legislature may wish to consider amending the law in a manner consistent with the opinion so the curt can in the future "do justice" or grant relief. These court opinions are sent over to the proper person or committee designated to handle them.
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