A new lawsuit filed in Connecticut federal court accuses some of the largest American banks, including JPMorgan Chase, Bank of America, Wells Fargo, Citibank, and U.S. Bank, of conspiring to fix the U.S. prime interest rate for more than three decades, according to Reuters.
The proposed class action, filed on Thursday, claims that the banks have coordinated since at least 1994 to set their prime lending rates in lockstep with the Wall Street Journal Prime Rate, which is exactly three percentage points above the federal funds rate. The WSJ Prime Rate serves as a benchmark for trillions of dollars in loans issued to consumers and small businesses across the country.
Allegations of decades-long collusion
The complaint argues that instead of independently determining their own prime rates based on individual financial factors, the banks agreed to move in unison, effectively eliminating competition and inflating borrowing costs. Plaintiffs allege that this coordination forced borrowers to pay artificially high interest rates on credit cards, small-business loans, and home equity lines of credit.
“This alleged conspiracy impacts millions of hard-working consumers pursuing the American Dream to own a home or need a small-business loan,” said attorney Patrick McGahan, who represents the plaintiffs.
The two named plaintiffs seek to represent a nationwide class that could include hundreds of thousands of borrowers. The lawsuit claims that about 70% of all consumer loans under $1 million are indexed to the WSJ Prime Rate, magnifying the alleged financial impact of the banks’ actions.
Background and industry response
According to the lawsuit, before 1992 the Wall Street Journal published a range of prime rates — the lowest and highest reported by large U.S. banks — which encouraged competition. But after the change to a single benchmark figure, banks began reporting identical rates for decades, a pattern plaintiffs call “statistically impossible” without coordination.
The defendants have either declined to comment or not yet responded to media inquiries. The Wall Street Journal and its publisher, Dow Jones, are not named in the case.
The complaint disputes public statements by the banks that they set their prime rates independently. Instead, it alleges that their alignment over decades was the result of a deliberate rate-fixing agreement.
The case, titled Normandin et al v. JPMorgan Chase Bank N.A. et al, was filed in the U.S. District Court for the District of Connecticut under case number 3:25-cv-01749.
As reported by Reuters, no appearances have yet been made for the defendants, but if proven, the case could expose major lenders to significant financial penalties and renewed scrutiny over long-standing industry practices that directly affect American borrowers.
