A U.S. District Court rejected JPMorgan Chase's (JPM: 41.17 -0.99%) motion to dismiss a lawsuit involving several home equity lines of credit the bank terminated.
In the original complaint, which pulled in several different parties, the plaintiffs accused JPMorgan's mortgage unit of reducing or suspending the homeowners' lines of credit in a manner that violated state consumer protection laws, the federal Truth-in-Lending Act and other state laws.
A representative with Chase declined to comment on the litigation and decision.
In court records, Judge Rebecca Pallmeyer with the District Court of Eastern Illinois agreed to let the case move forward saying "the plaintiffs have adequately pleaded a violation of TILA and Regulation Z (part of the Truth-in-Lending Act), by alleging that defendant suspended or reduced HELOCs in the absence of a significant decline in the value of the property securing the HELOC."
The judge said the homeowners' claim that the use of automated valuation models and the use of 'unlawful triggering events' cannot serve as a basis for their allegations alone.
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