* Judge grants preliminary approval, sets Nov 16 hearing
* Bank boosted minimum payments on card balances
Aug 10 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
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.