Chase Bank Loan Rate Class Action Lawsuit Continues with Unfair Competition Claim

Chase Loan Rate Class Action Continues with Unfair Competition Claim

By Dominic Rivera

JPMorgan Chase Bank failed to convince U.S. District Judge John A. Kronstadt to toss an Unfair Competition Law claim in a class action lawsuit accusing the bank of defrauding homeowners into paying higher interest rates on their mortgages.

In their request to dismiss the claim, the bank argued that plaintiffs Barbara Schramm and Steven Weinstein did not show any sufficient economic injury, or if there was an injury that it was caused by alleged deceptive practices. The judge disagreed, reasoning that plaintiffs only need to show they could have obtained better rates from the bank, and not through other lenders.

“Because plaintiffs have alleged that they could have paid less for the same loan from defendants, they did not receive what was promised. Under these circumstances, plaintiffs have standing to bring their [unfair competition law] claim,” Judge Kronstadt said.

The unfair competition claim is part of a class action lawsuit filed by the plaintiffs in December 2009. The Chase loan class action lawsuit said the plaintiffs made payments to Chase under an initial interest rate of 3.875 percent. They relied on Chase’s claim that the rate was the sum of a specified index and a fixed margin, but it turned out that the sum was actually 3.5 percent, according to the class action lawsuit.

The plaintiffs’ claims for fraud and unfair competition were initially dismissed, but before any final judgment was made the judge found a new California Supreme Court decision warranted a trial for the class action lawsuit.

The plaintiffs are represented by Craig M. Collins, Gary Ho and Steven A. Blum of Blum Collins LLP.

The Chase Bank Loan Rate Class Action Lawsuit is Barbara L. Schramm, et al. v. JPMorgan Chase Bank NA, et al., Case No. 2:09-cv-09442, in the U.S. District Court for the Central District of California.

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