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Dreher Tomkies LLP
Attorneys at Law
2750 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone: 614-628-8000
Fax: 614-628-1600

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On March 10, 2003, the United States Supreme Court invited the Solicitor General to file a brief expressing the views of the United States in Household Credit Services, Inc. v. Pfennig. The current Solicitor General is Theodore Olson, who was nominated by President Bush and confirmed by the U.S. Senate in 2001. This invitation appears to be a small victory for creditors in that the United States Supreme Court has not denied the petition for certiorari and potentially could find merit in the issues raised by the Defendants and Amici Curiae.

In Pfennig, the United States District Court for the Southern District of Ohio held that overlimit fees imposed after a credit card holder is permitted to make purchases beyond the established credit limit fall “squarely within the statutory definition of a finance charge” as “incident to an extension of credit,” and found Regulation Z’s exclusion of such overlimit fees from the definition of “finance charge” to be invalid. The court limited its holding to those creditors who knowingly permit the credit card holder to exceed the established credit limit and then impose a fee incident to that extension of credit. The United States Court of Appeals for the Sixth Circuit affirmed the trial court’s decision and later denied a petition for rehearing en banc.

Judy Scheiderer and Tiffany Scurti-Swain