Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 2

McCoy was the holder of a credit card issued by Chase Bank. The cardholder agreement provided that McCoy was eligible for "preferred rates" as long as he met certain conditions. If any of those conditions were not met, Chase reserved the right to raise the rate, up to a pre-set maximum, and to apply the change to both existing and new balances. Chase increased his interest rate due to his delinquency or default and applied that increase retroactively. McCoy filed suit pursuant to TILA. Does the Federal Reserve Board's Regulation Z require subsequent disclosure because the rate increase constitutes a "change in terms"? [Chase Bank U.S.A., N.A. v. McCoy, 131 S. Ct. 871 (2011).]