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Major US Banks Accused of Colluding to Fix Prime Interest Rate in New Federal Lawsuit

By  |  October 19, 2025

Several of the nation’s largest financial institutions — including JPMorgan Chase, Bank of America, and Wells Fargo — are facing a new class-action lawsuit accusing them of conspiring to manipulate the U.S. prime interest rate for over three decades. The case, filed Thursday in federal court in Connecticut, alleges that eight major banks coordinated their lending benchmarks, inflating borrowing costs for consumers and small businesses, according to Reuters.

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    The lawsuit contends that since at least 1994, the banks have aligned their prime lending rates with the Wall Street Journal’s published “WSJ Prime Rate,” which is set exactly three percentage points above the federal funds rate. Per Reuters, this benchmark influences trillions of dollars in loans across credit cards, mortgages, and business lines of credit nationwide.

    Two consumers are leading the proposed class action, seeking to represent hundreds of thousands of borrowers they say were overcharged due to the alleged rate-fixing. The complaint asserts that roughly 70% of all consumer loans under $1 million are tied to the WSJ Prime Rate. “This alleged conspiracy impacts millions of hard-working consumers pursuing the American Dream to own a home or need a small-business loan,” said Patrick McGahan, one of the attorneys representing the plaintiffs.

    JPMorgan Chase, Bank of America, Wells Fargo, Citibank, and U.S. Bank either declined to comment or did not immediately respond to Reuters’ requests for comment. The Wall Street Journal and its publisher, Dow Jones, are not named as defendants in the case, and Dow Jones also did not respond to a request for comment, according to Reuters.

    Read more: Judge Dismisses Antitrust Case Against Major Banks Over Bond Pricing

    The lawsuit traces the alleged collusion back to changes in how the prime rate was reported. Before 1992, the Journal published a range of prime lending rates from major banks — including the highest and lowest — which the plaintiffs claim encouraged competition. The paper later shifted to publishing a single number, the WSJ Prime Rate, derived from a small group of large banks, which plaintiffs argue made coordination easier.

    According to Reuters, the suit disputes the banks’ public claims that each institution independently sets its prime rate based on unique financial factors. The plaintiffs argue that decades of nearly identical rate movements among major lenders make it “impossible” the banks were acting independently.

    The case, Normandin et al v. JPMorgan Chase Bank N.A. et al, is being heard in the U.S. District Court for the District of Connecticut, under case number 3:25-cv-01749.

    Source: Reuters