Frequently Asked Questions
- What is this lawsuit about?
- Why did I get a Notice?
- Who is in the class?
- What are the terms of the Settlement?
- What are the benefits of the Settlement?
- How will my Settlement Payment be determined and sent?
- How will the lawyers and Class Representatives be compensated?
- What happens next?
- What are my options?
- How do I object to, or comment on, the Settlement?
- What claims will be released by this Settlement?
- Do I have a lawyer in this class action?
- Should I hire my own lawyer for this case?
- Where can I get more information?
- What was the outcome of the Fairness Hearing and when will I receive my Settlement Payment?
This lawsuit concerns promotional loan offers that some Chase credit cardholders accepted, whereby the loan was subject to a fixed interest rate (APR) until the loan balance was paid off in full. In November 2008 and June 2009, Chase sent some of these cardholders a "Change in Terms" notice, raising their minimum monthly payment from 2% to 5% of their outstanding account balance and, in some cases, applying a $10 monthly fee to their account. Plaintiffs brought this lawsuit alleging that the Change in Terms was improper.
Chase contends that the Change in Terms was lawful and denies that its conduct was in any way illegal or improper. The Court has not decided whether plaintiffs or Chase are correct. The Court dismissed certain of plaintiffs' claims, but did not dismiss plaintiffs' claim that Chase violated the "implied covenant of good faith and fair dealing." Plaintiffs' claim has not been decided on the merits. By agreeing to the Settlement, neither Chase nor plaintiffs make any admissions regarding the merits of the allegations, claims or defenses in this case.
The United States District Court for the Northern District of California is overseeing this class action. The lawsuit is known as In re: Chase Bank USA, N.A. "Check Loan" Contract Litigation, MDL No. 2032, Case No. 3:09-md-02032 MMC.
Chase's records show that your account was subject to one of the "Change in Terms" notices, and that you are in the Class (the Class definition is set forth in Section 3 below).
If you received a Settlement Notice, you have been identified as a member of the Class based on Chase's records. The Class is defined as:
All persons or entities in the United States who entered into a loan agreement with Chase, whereby Chase promised a fixed APR until the loan balance was paid in full, and (i) whose minimum monthly payment was increased by Chase to 5% of the outstanding balance, or (ii) who were notified by Chase of a minimum payment increase and subsequently closed their account or agreed to an alternative change in terms offered by Chase excluding those who have submitted a valid request for exclusion from the Settlement.
The complete terms of the Settlement are set forth in a Class Settlement Agreement and Release, which is on file with the Court and is also available here. The notice provides only a summary of the terms of the Settlement. The Settlement benefits are summarized below.
The Settlement is now effective. Chase has paid One Hundred Million Dollars ($100,000,000.00) into the Settlement Fund. This money will be used: (1) to pay the costs of distributing this notice and other costs of administering the Settlement and Settlement Fund, including taxes; (2) to pay court-awarded attorneys’ fees and litigation expenses of the attorneys appointed by the Court to represent the Class ("Class Counsel") and service awards to plaintiffs to compensate them for their efforts and expenses incurred on behalf of the Class; (3) to make settlement payments to Class Members, as described in Section 6 below; and (4) to the extent any amounts remain in the Settlement Fund as a result of uncashed settlement checks, to satisfy other claims related to the Change in Terms with the remainder paid as cy pres to Consumer Action for use in promoting consumer financial education.
In addition, certain Class Members who received the Change in Terms notice were allowed to maintain a 2% minimum monthly payment in exchange for agreeing to an increase in the APR applicable to their fixed rate promotional loans, to 7.99% APR. This was sometimes referred to as the "Alternative Offer." As part of the Settlement, Chase has agreed that it will not exercise its right to increase APRs on Class Members' Alternative Offer balances, and will maintain a 2% minimum monthly payment for all Class Member Accounts with Alternative Offer balances as long as they include Alternative Offer balances, unless a Class Member defaults.
The Settlement is now effective. Eligible Class Members have been mailed a Settlement Payment by the Settlement Administrator in the amount of their individual share of the Settlement Fund available for distribution. Each Class Member's share is comprised of: (i) a $25.00 base payment; plus (ii) for most, but not all, Class Members, an additional payment intended to give the most compensation to those Class Members most affected by the Change in Terms, taking into account, among other things, the amount of the initial transaction fees paid for their fixed rate promotional loans (if there is no record of a transaction fee, an average transaction fee will be used), how much of the promotional balances were paid back before the Change in Terms occurred, how long the promotional loans were in the Class Member's account before the Change in Terms, and whether and when the promotional balances were restored to their original terms after the Change in Terms were announced. A limited number of persons were notified of the change in terms but, for example, did not have balances at the time the change in terms took effect, and will not receive an additional payment (these Class Members still receive the $25.00 base payment).
Class Counsel (identified in Section 12 below) petitioned the Court to award them up to 25% of the Settlement Fund (or $25,000,000.00) for their attorneys' fees, plus reimbursement of their litigation expenses incurred in prosecuting this case (approximately $1.5 million). In addition, Class Counsel asked the Court to award 11 plaintiffs representing the Class service awards of up to $7,500 each, and to award 45 other plaintiffs who filed related actions relating to the Change in Terms service awards of up to $1,000 each, to compensate them for their efforts, time and expenses incurred on behalf of the Class in this lawsuit. A copy of Class Counsel’s Notice of and Motion for Award of Attorneys’ Fees, Expenses, and for Service Awards is available on the Court Documents Page.
The Settlement is now effective. The Court determined that the Settlement is fair, reasonable, and adequate to the Class Members and is in the best interests of the Class.
YOU DID NOT HAVE TO APPEAR AT THE FAIRNESS HEARING TO RECEIVE THE BENEFITS OF THE SETTLEMENT.
You did not need to do anything in order to receive the benefits of the Settlement. The Settlement is now effective. Eligible Class Members have been mailed a Settlement Payment as described in Section 6 above.
You did not need to object or comment on the Settlement in order to receive a Settlement Payment.
Please refer to the Settlement Notice you received by mail for additional information regarding opt-out rights.
The postmark deadline to object to, or comment on, the Settlement was October 5, 2012.
The Settlement has been approved by the Court and is now effective and legally binding on all Class Members. In summary, eligible Class Members have released all claims that were alleged, or that could have been alleged, in this class action relating to the Change in Terms and Alternative Offer. The release, which is in the Class Settlement Agreement and Release on file with the Court and available on the Court Documents Page on this website, is as follows:
As of the Effective Date of the Agreement, the Class Representatives and each Class Member, their respective heirs, executors, administrators, representatives, agents, attorneys, partners, successors, predecessors-in-interest, assigns and all persons acting for or on their behalf, shall be deemed to have fully, finally and forever released Chase, the Chase Issuance Trust, JPMorgan Chase & Co. and any Person with an ownership interest in any of the Class Member Accounts, together with their predecessors, successors (including, without limitation, acquirers of all or substantially all of its assets, stock or other ownership interests) and assigns; the past, present, and future, direct and indirect, parents (including, but not limited to holding companies), subsidiaries and affiliates of any of the above; and the past, present and future principals, trustees, partners, claims administrators, officers, directors, employees, agents, attorneys, shareholders, advisors, predecessors, successors (including, without limitation, acquirers of all or substantially all of their assets, stock, or other ownership interests), assigns, representatives, heirs, executors, and administrators of any of the above, (“Released Parties”), from any and all actual or potential claims, actions, causes of action, suits, counterclaims, cross claims, third party claims, contentions, allegations, and assertions of wrongdoing, and any demands for any and all debts, obligations, liabilities, damages (whether actual, compensatory, treble, punitive, exemplary, statutory, or otherwise), attorneys’ fees, costs, expenses, restitution, disgorgement, injunctive relief, any other type of equitable, legal or statutory relief, any other benefits, or any penalties of any type whatever (whether sought by a Class Member directly or on behalf of a Class Member by another Person), regardless of when such claims accrue, whether known or unknown, suspected or unsuspected, contingent or non-contingent, discovered or undiscovered, whether asserted in federal court, state court, arbitration or otherwise, and whether triable before a judge or jury or otherwise, including but not limited to those based on breach of contract or any other contractual theory, breach of the implied covenant of good faith and fair dealing, unconscionability, unjust enrichment, or the unfair and deceptive acts and practices statutes of any of the states, or any other state, federal or local law, statute, regulation or common law, that any Class Representative, Class Member or Related Action Plaintiff acting for or on behalf of a Class Member ever had, now has, or hereafter can, shall, or may in the future have, arising out of or relating in any way to any conduct, acts, transactions, events, occurrences, statements, omissions, or failures to act of any Released Party that are alleged or which could have been alleged from the beginning of time in any of the complaints (including but not limited to the Master Complaint) or other pleadings filed or presented in the Action or in any of the Related Actions, or that otherwise relate in any way whatsoever to any or all of the Changes-in-Terms or to the Alternative Offer, ("Released Claims"). Without limiting the foregoing, the Released Claims specifically include claims that the Class Representatives and Class Members do not know or suspect to exist in their favor as of or prior to the Effective Date. The Parties agree (and each Class Member by operation of law shall be deemed to have agreed) that this paragraph constitutes a waiver of Section 1542 of the California Civil Code and any similar or comparable provisions, rights and benefits conferred by the law of any state or territory of the United States or any jurisdiction, and any principle of common law.
The Class Representatives, on their own behalf and on behalf of all Class Members, covenant and agree that they shall not hereafter be permitted to seek to establish (or permit another to act for them in a representative capacity to seek to establish) liability against any Released Party for any Released Claim.
Yes. The Court decided that the law firms representing plaintiffs are qualified to represent you and all of the other Class Members, and has appointed them as "Class Counsel." The law firms who have been appointed as Class Counsel are: Lieff, Cabraser, Heimann & Bernstein, LLP; The Sturdevant Law Firm, P.C.; Giskan, Solotaroff, Anderson & Stewart LLP; Green & Noblin, P.C.; Girard Gibbs LLP; and Milberg LLP.
You do not have to pay Class Counsel for their time or expenses incurred in this case out of your pocket. Instead, Class Counsel petitioned the Court and were awarded fees and expenses that were paid from the Settlement Fund as described in Section 7 above.
You do not need to hire your own lawyer because Class Counsel represents you and the other members of the Class already. However, you have the right to hire your own lawyer. If you want your own lawyer separate from Class Counsel, you will have to pay that lawyer.
More information can be found on this website on the Court Documents Page. That page includes links to the Master Complaint filed by plaintiffs, and Chase's answer thereto, the Court's order granting in part and denying in part Chase’s motion to dismiss plaintiffs’ claims, the Court’s order granting class certification, the Class Settlement Agreement and Release, the Preliminary Approval Order, and the Final Approval Order and Judgment.
You may obtain more information by calling the Settlement Administrator toll free at 1-800-460-4936.
You may also examine and copy the class action complaint and other pleadings in this class action at any time during regular office hours in the office of the Clerk of the United States District Court for the Northern District of California, San Francisco Division, at 450 Golden Gate Ave., San Francisco, California 94102.
DO NOT CONTACT THE COURT OR CHASE.
The Chase Check Loan Settlement received final approval by the Court on November 16, 2012. Per the terms of the Settlement and the Final Approval Order, the Settlement is now effective. Eligible Class Members have been mailed a Settlement Payment by the Settlement Administrator in the amount of their individual share of the Settlement Fund available for distribution.