550 F.3d 915 (9th Cir. 2008), 07-56236, Davis v. Pacific Capital Bank, N.A.

Docket Nº:07-56236.
Citation:550 F.3d 915
Party Name:Felicia D. DAVIS, for herself and for all others similarly situated, Plaintiffs-Appellants, v. PACIFIC CAPITAL BANK, N. A., Defendant-Appellee.
Case Date:December 24, 2008
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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550 F.3d 915 (9th Cir. 2008)

Felicia D. DAVIS, for herself and for all others similarly situated, Plaintiffs-Appellants,

v.

PACIFIC CAPITAL BANK, N. A., Defendant-Appellee.

No. 07-56236.

United States Court of Appeals, Ninth Circuit.

December 24, 2008

Argued and Submitted Nov. 17, 2008.

Jordan M. Lewis, Siegel, Brill, Greupner, Duffy & Foster, P.A., Minneapolis, MN, for the plaintiff-appellant.

Brad W. Seiling, Manatt, Phelps & Phillips, LLP, Los Angeles, CA, for the defendant-appellee.

Appeal from the United States District Court for the Central District of California; Manuel L. Real, District Judge, Presiding. D.C. No. CV-07-02786-R.

Before: MYRON H. BRIGHT,[*]STEPHEN S. TROTT, and HAWKINS, Circuit Judges.

HAWKINS, Circuit Judge:

Must a creditor who imposes a flat finance charge that does not vary with the term of a Refund Anticipation Loan refund a portion of the charge as “ unearned interest" under 15 U.S.C. § 1615 when the loan

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is repaid earlier than anticipated in the loan agreement? Concluding that the finance charge in question is not an “ interest" charge, we answer no and affirm. 1

FACTUAL AND PROCEDURAL BACKGROUND

Felicia Davis (“ Davis" ) brought this action for herself and others similarly situated against Pacific Capital Bank, N.A., (“ Pacific" ) under California's Unfair Competition Law, Cal. Bus. & Prof.Code § 17200. Davis alleges she obtained a “ Refund Anticipation Loan" (“ RAL" ) secured by her anticipated federal income tax refund, which Davis authorized the Internal Revenue Service to deposit into an account established by Pacific. The loan document, attached as an exhibit to Davis's complaint, provided that $1,115 was credited to Davis, the credit would cost $85, the Annual Percentage Rate “ cost of [the] credit at a yearly rate" was 57.969%, and that one payment of $1,200 would be due forty-eight days after Pacific approved the loan. The loan document provided that, if Davis repaid the loan early, she would not be entitled to a refund of any part of the $85 finance charge, but the loan document did not require Davis to pay any additional finance charges if she repaid the loan after the anticipated forty-eight day period. Davis alleges her refund was deposited ten days earlier than anticipated in the loan agreement, and, as a consequence, Pacific's failure to refund a $17.74 pro-rated portion of her finance charge was “ unlawful" or “ unfair" because § 1615 requires Pacific to refund unearned...

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