Davis

DISCUSSION

[1] Section 1615 states that “[i]f a consumer prepays in full the financed amount under any consumer credit transaction, the creditor shall promptly refund any unearned portion of the interest charge to the consumer.” 15 U.S.C. § 1615(a)(1). Because Congress did not define the word “interest” as used in § 1615, it is not immediately obvious whether it encom- passes the finance charge at issue. DAVIS v. PACIFIC CAPITAL BANK 16775 In other contexts, the term “interest” has been interpreted broadly. See, e.g., 12 C.F.R. § 7.4001 (defining “interest,” as used in the National Bank Act, 12 U.S.C. § 85, to include “numerical periodic rates, late fees, creditor-imposed not suf- ficient funds (NSF) fees . . . , overlimit fees, annual fees, cash advance fees, and membership fees”). Charges that do not vary according to the length of delay before repayment are sometimes still “interest.” See Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 745-46 (1996) (“Any flat charge may, of course, readily be converted to a percentage charge — which was indeed the basis for 19th century decisions holding that flat charges violated state usury laws establishing maximum…