The U.S. Supreme Court listened to oral arguments earlier this month in the case of Chase Bank USA vs. McCoy, in which the plaintiff, James McCoy, is suing his lender over a retroactive rate hike. McCoy says he was not properly disclosed ahead of time, according to a report from the Maryland Daily Record. The bank says that the increase, which was a penalty for a late payment on his credit card debt, was clearly outlined in documentation it sent him.
At the time, Regulation Z stated that lenders must give at least 15 days notice prior to any rate increase on credit card debt, the report said. While the lender acknowledged that the disclosure was somewhat ambiguous – it only said it "may" increase rates after a late payment – it also says that this was in keeping with the industry standard at the time.
The credit card industry has gone through many regulatory changes mandated by the federal government over the last year, and if the Supreme Court rules in McCoy's favor, more could come.