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Court Grants Final Approval of Class Action Settlement over Chase Home Equity Line Overcharges
On January, 29, 2010, Justice Richard B. Lowe III of the New York Supreme Court for New York County entered an order affording final approval of a settlement of this class action by which all class members will receive 100% of their damages, without any deduction for attorneys fees or expenses. The Settlement is on behalf of a class (“Class”) consisting of all persons who have had an outstanding balance pursuant to an EQUITYLINK CREDIT LINE AGREEMENT at any time during the period October 1, 2007 through and including June 15, 2008, and paid interest on such balances.
This class action concerns JP Morgan Chase, N.A.”s (“Chase”) alleged practice of improperly calculating the interest due on its EQUITYLINK home equity loan in violation of the express terms of the EQUITY LINK CREDIT LINE AGREEMENT. Pursuant to the terms of the EQUITYLINK CREDIT LINE AGREEMENT, the interest rate charged on any outstanding balances is subject to change on a monthly basis. Specifically, the Annual Percentage Rate (“APR”) from which interest is computed each month is to be determined by “subtracting 0.50% (the “Margin”) from the highest Prime Rate published in the column labeled “Money Rates” in the Wall Street Journal® (the “Index”) on the last Monday of the prior calendar month.” The Agreement further provides that “[a]ny increase or decrease in the Annual Percentage Rate will be effective on the first day of the billing cycle.” Instead of calculating the monthly interest in this manner, the Complaint alleges that Chase utilized the Index on the last Monday of two months prior. As a result, Plaintiff and the other borrowers pursuant to the EQUITYLINK CREDIT LINE AGREEMENT were charged the wrong interest rate since October 2007 when the Index began to decline.
The full amount of the overcharges plus an interest component has already been credited to Class member EQUITYLINK accounts, if the Class member still maintained the line with Chase, or paid by check if the Class members no longer maintained the line with Chase.
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