UPDATE 1-Judge OKs JPMorgan $100 million credit card settlement
* Judge grants preliminary approval, sets Nov 16 hearing
* Bank boosted minimum payments on card balances
Aug 10 (Reuters) - JPMorgan Chase & Co won a federal judge's preliminary approval of a $100 million class-action settlement with credit card customers who accused the bank of improperly trying to generate higher fees by boosting their minimum payments.
The settlement resolves claims over Chase's decision in late 2008 and 2009 to boost minimum monthly payments for thousands of cardholders to 5 percent of account balances from 2 percent.
Cardholders said Chase had induced them to transfer loan balances from other lenders to Chase card accounts, where the debt would be consolidated into fixed-rate loans.
But they said the New York-based bank later boosted minimum payments to force them to either accept higher rates to preserve a lower payment requirement, or to cause late payments that would trigger new fees or penalty interest rates.
U.S. District Judge Maxine Chesney in San Francisco on Thursday granted preliminary approval to the settlement as fair, reasonable and adequate. A hearing at which she would consider final approval was scheduled for Nov. 16.
Lawyers for the cardholders last month said the $100 million is 45 percent of the $220 million of up-front transaction fees that their clients paid for Chase's promotional loans.
These lawyers will seek as much as $25 million of the settlement fund for legal fees, plus about $1.5 million to cover litigation costs, according to court papers.
The case is In re: Chase Bank USA NA "Check Loan" Contract Litigation, U.S. District Court, Northern District of California, No. 09-md-02032.
- Tweet this
- Share this
- Digg this
- UPDATE 1-Putin foe Khodorkovsky says Russia is lying about Ukraine
- Missing Malaysian jet may have disintegrated in mid-air - source
- UPDATE 2-Interpol probes more suspect passports from missing flight
- UPDATE 3-Putin defends Crimea's decision to hold referendum
- UPDATE 4-William Clay Ford Sr., grandson of pioneer automaker, dies at 88