of § 1631(a) involves two separate issues. The first is whether the charge was or was not interest. If the charge was interest then it was not mislabeled and the disclosure was unobjectionable. Only if the charge was not interest is the second question reached, namely, whether labeling as "interest" a settlement fee that is actually a charge in addition to the interest due is impermissible because unclear. Thus, for the TILA count to be ripe for summary judgment, we must be able to answer, as a matter of law, either the first or second question in defendants' favor.
The first question, whether the settlement charge was interest, cannot yet be answered. This question itself requires two separate determinations: (a) a definition of interest; and (b) a determination whether the charge collected here is within that definition. We confess some uncertainty whether these are issues of law or fact.
Although used in several TILA provisions, e.g., 15 U.S.C. § 1605(a)(1); 12 C.F.R. 226.4(a)(1), the term "interest" is nowhere defined in the statute or regulations, nor is it defined in any of the loan documents used in this case. Thus, for our purposes, we are confronted with an undefined term.
To the extent that the disclosure statement in which the "interest" label appears is considered to be part of a contractual transaction, the meaning intended by the parties should control and both the definition and the determination whether this charge is within that definition are questions of fact. Cf. Maes v. Motivation for Tomorrow, Inc., 356 F.Supp. 47 (N.D.Cal.1973) (contractual intent is fact question in TILA case).
However, the disclosure statement is not actually part of the contract between plaintiffs and defendants; only the bond agreement is. Rather, the statement is an ancillary document included because required by federal statute. To the extent that the disclosure statement is thus considered to be part of the TILA scheme, the definition of any term used therein arguably is an issue of law for the court to decide, with the determination whether the charge here is interest also being a matter for the bench.
Because the controversial term is one supplied by the parties, albeit on a required form, rather than one literally prescribed by the statute or Regulation Z, 12 C.F.R. 226.1 Et seq., we on balance conclude that the issue is one for the jury to decide. This conclusion, of course, compels us to deny defendants' motion for summary judgment.
We need not, however, rely solely on resolution of the law/fact dilemma to deny defendants' motion because summary judgment here is unavailable on an alternative ground as well. Prerequisite to a determination, either by the court or the jury, whether the settlement fee was mislabeled "interest" is an answer to the question discussed in II A above whether the practice of collecting that charge was or was not "interest in advance at a greater effective rate." As we stated there, that question is a "genuine issue of material fact" unresolved by the briefs and exhibits and unanswered at the hearing. Therefore, because we cannot determine whether the practice was interest in advance, we cannot decide whether the charge was interest. The case must proceed to trial of that issue, unless we are able to conclude, as a matter of law, that even if the charge was Not interest the clear disclosure requirement of TILA was not violated.
This we are unable to do. Without resolution of the underlying issue whether the practice was interest in advance we cannot begin to measure the disclosure statement against the clarity requirement.
Given the divergent conclusions that courts have reached on disclosure questions, Compare Lewis v. Walker-Thomas Furniture Co., Inc., 416 F.Supp. 514, 517 (D.D.C.1976) (consistent and uniform terminology prerequisite to informed use of credit) With Matter of Black, 411 F.Supp. 749 (S.D.Ohio 1975) (TILA satisfied where cost of credit is clear regardless of precision of terminology), we will not enter the thicket until the underlying facts are settled.
Accordingly, we deny defendants' motion for summary judgment as to the TILA count.