WASHINGTON (1/25/11)--The U.S. Supreme Court ruled Monday that consumers could not proceed with a lawsuit against Chase Bank USA for not providing written notice when it raised credit-card interest rates for cardholders who were late on paying creditors. The unanimous opinion said Chase's actions were consistent with the Federal Reserve Board's Regulation Z stemming from the U.S. Truth in Lending Act when the bank raised plaintiff James A. McCoy's interest rate for delinquency or default without providing written notification (The Wall Street Journal and PaymentsSource Jan. 24). Chase's cardholder agreement stipulated the bank could increase McCoy's interest rates in the event of a default. The federal law at the time the lawsuit was filed in 2006 did not require banks to give such notice for raising cardholders' rates, said the opinion, written by Justice Sonia Sotomayor. The Fed changed the regulation in 2009 and now requires banks to provide advance notice of at least 45 days before making any change in interest rate because of default, even if the default rate was specified already in the original contract. The court, relying on a brief filed by the Fed in the case, said that because the Fed's interpretation is consistent with the regulatory text, "we need look no further in deciding this case." The old version of the rule was not clear on whether bank notification of rate increases was required, said the opinion. The opinion clears up for consumers, credit unions and other financial institutions a split in the interpretation of Regulation Z. Lower courts were split on the issue. Some appeals courts ruled against Chase, prompting the filing of several class-action cases in California against Chase and other banks.