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Home / Opinion / 09-329 Chase Bank USA, N.A. v. McCoy

09-329 Chase Bank USA, N.A. v. McCoy

Consumer Protection

Regulation Z did not require Chase to provide McCoy with a change-in-terms notice before implementing the agreement term allowing it to raise his interest rate, up to a pre-set maximum, following delinquency or default.

The Board has made clear in its amicus brief to this Court that, in its view, Chase was not required to give McCoy notice of the interest rate increase under the applicable version of Regulation Z. This Court defers to an agency’s interpretation of its own regulation, advanced in a legal brief, unless that interpretation is “plainly erroneous or inconsistent with the regulation.” Auer v. Robbins, 519 U. S. 452, 461 (internal quotation marks omitted). In Auer, the Court deferred to the Secretary of Labor’s interpretation of his own regulation, presented in an amicus brief submitted by the agency at the Court’s invitation. The Court held that the fact that the interpretation came in a legal brief did not, “in the circumstances of th[at] case, make it unworthy of deference.” Id., at 462. The interpretation was “in no sense a post hoc rationalization advanced by an agency seeking to defend past agency action against attack,” ibid. (internal quotation marks and alteration omitted), and there was “no reason to suspect that the interpretation [did] not reflect the agency’s fair and considered judgment on the matter in question,” ibid. The brief submitted by the Board here, at the Court’s invitation, is no different. As in Auer, there is no reason to believe that the Board’s interpretation is a “post hoc rationalization” taken as a litigation position, for the Board is not a party to this case. And its interpretation is neither “plainly erroneous” nor “inconsistent with” the indeterminate text of Regulation Z. Thus, there is no reason to suspect that the Board’s position in its amicus brief reflects anything other than its fair and considered judgment as to what the regulation required at the time this dispute arose. That Congress and the Board may currently hold a different view does not mean that deference is not warranted to the Board’s understanding of what the applicable version of Regulation Z required. Under Auer, therefore, it is clear that deference to the interpretation in the agency amicus brief is warranted.

559 F. 3d 963, reversed and remanded.

Local effect:    The opinion is consistent with Seventh Circuit precedent on the issue. Swanson v. Bank of America, N.A., 559 F.3d 653, reh’g denied,, 563 F.3d 634 (7th Cir. 2009).

09-329 Chase Bank USA, N.A. v. McCoy

Sotomayor, J.

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