Chase Settlement Over Violation of Equal Credit Opportunity Act

A settlement has been proposed in a class action lawsuit pending in the United States District Court for the Northern District of California styled Chen v. Chase Bank USA, N.A. et al., Civil Case No. 3:19-cv-01082 (JSC) (the “Action”). The lawsuit alleges that Chase Bank violated the Equal Credit Opportunity Act requirement to provide the specific reason(s) for taking an adverse action on a credit application by giving “previous unsatisfactory relationship with this bank” or “previous unsatisfactory relationship with us or one of our affiliates” as the only reason for taking an adverse action in connection with a credit card account. Chase denies that its actions violated the law, and no court or other entity has made any judgment or other determination that Chase violated the law.

Who is Eligible?

The Settlement Class is comprised of all natural persons to whom Chase sent a letter giving either “previous unsatisfactory relationship with this bank” or “previous unsatisfactory relationship with us or one of our affiliates” as the only reason for taking an adverse action in connection with a credit card account during the period beginning January 28, 2014 and ending on November 22, 2019.

The following individuals are excluded from the Settlement Class: officers and directors of Chase and its parents, subsidiaries, affiliates, and any entity in which Chase has a controlling interest; and all judges assigned to hear any aspect of this litigation, as well as their immediate family members.u.

Payout

Under the Settlement, Chase has agreed to pay $244,659 for:

payments to Settlement Class Members (estimated at $187,659);
notice and administration costs (estimated at $52,000); and
an incentive award to the Settlement Class Representative of up to $5,000.

Chase has also agreed to separately pay court-approved attorneys’ fees and expenses of up to $185,000 and to stop the challenged practices for five years. In return, Settlement Class Members who do not exclude themselves will release Chase and related parties from certain claims as described in the Settlement Agreement.

Settlement Class Members who submit a valid claim form postmarked or submitted through this settlement website by April 28, 2020, will receive a pro rata cash payment from the settlement fund. Payments are estimated to be $148 based on a projected 7% claims rate, but may be significantly less if there are an unexpectedly large number of claims.