Alert December 14, 2010

U.S. Supreme Court Hears Oral Argument Concerning Whether FRB Brief Should Be Given Judicial Deference

On December 8, 2010, in the context of oral argument at the U.S. Supreme Court (the “Court”) involving whether a credit card bank’s increase in the interest rate on a consumer’s credit card constitutes a violation of the Truth In Lending Act and the FRB’s Regulation Z thereunder, the Court heard argument on whether the Court should give deference to a legal brief by the FRB that interprets Regulation Z.  Counsel to the bank argued that the FRB’s brief should be considered by the Court because it articulated positions that are consistent with explanations given by the FRB during its four-year rulemaking process.  Counsel to the consumer, however, argued that the FRB brief should not be given judicial deference because no interpretation is required in the area as, he asserted, the language of Regulation Z in this matter is unambiguous.  (Chase Bank USA N.A. v. McCoy, U.S. 09-329, argued 12/8/10.)