Class Action Alleges Commerce Bank Charges Cardholders Excessive Interest Rates Under MO Law

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Two plaintiffs allege in a proposed class action lawsuit that Commerce Bank has run afoul of Missouri law by charging credit cardholders excessive interest that the bank compounds daily.

The plaintiffs, two Illinois residents, say the Missouri-headquartered company’s governing agreements with cardholders allow for interest charges to be computed daily—by multiplying a card’s daily balance by the daily interest rate. The interest is then added to a cardholder’s daily balance for all days on which a balance is owed. 

Commerce Bank’s method of computing interest charges—“interest upon interest,” the case describes it—results in compounded interest. According to the lawsuit, Commerce Bank’s governing agreements defer to the laws of Missouri, a state that prohibits banks from compounding interest.

“The interest extracted by Commerce Bank from [the plaintiff] and the class was excessive,” the lawsuit argues, “in that it unlawfully charged and received daily compounded interest in violation of Missouri law.