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Text: Because § 1605 is ambiguous, the Board's regulation implementing § 1605 "is binding in the courts unless procedurally defective, arbitrary or capricious in substance, or manifestly contrary to the statute." United States v. Mead Corp., 533 U. S. 218, 227 (2001).

Regulation Z's exclusion of over-limit fees from the term "finance charge" is in no way manifestly contrary to § 1605. Regulation Z defines the term "finance charge" as "the cost of consumer credit." 12 CFR § 226.4 (2004). It specifically excludes from the definition of "finance charge" the following:

"(1) Application fees charged to all applicants for credit, whether or not credit is actually extended.
"(2) Charges for actual unanticipated late payment, for exceeding a credit limit, or for delinquency, default, or a similar occurrence.
"(3) Charges imposed by a financial institution for paying items that overdraw an account, unless the payment of such items and the imposition of the charge were previously agreed upon in writing.
"(4) Fees charged for participation in a credit plan, whether assessed on an annual or other periodic basis.
*243 "(5) Seller's points.
"(6) Interest forfeited as a result of an interest reduction required by law on a time deposit used as security for an extension of credit.
"(7) [Certain fees related to real estate.]
"(8) Discounts offered to induce payment for a purchase by cash, check, or other means, as provided in section 167(b) of the Act." § 226.4(c) (emphasis added).
The Board adopted the regulation to emphasize "disclosures that are relevant to credit decisions, as opposed to disclosures related to events occurring after the initial credit choice," because "the primary goals of [TILA] are not particularly enhanced by regulatory provisions relating to changes in terms on outstanding obligations and on the effects of the failure to comply with the terms of the obligation." 45 Fed. Reg. 80649 (1980). The Board's decision to emphasize disclosures that are most relevant to a consumer's initial credit decisions reflects an understanding that "[m]eaningful disclosure does not mean more disclosure," but instead "describes a balance between `competing considerations of complete disclosure . . . and the need to avoid . . . [informational overload].'" Ford Motor Credit Co., 444 U. S., at 568 (quoting S. Rep. No. 96-73, p. 3 (1979)). Although the fees excluded from the term "finance charge" in Regulation Z (e. g., application charges, late payment charges, and over-limit fees) might be relevant to a consumer's credit decision, the Board rationally concluded that these fees _x0097_ which are not automatically recurring or are imposed only when a consumer defaults on a credit agreement _x0097_ are less relevant to determining the true cost of credit. Because over-limit fees, which are imposed only when a consumer breaches the terms of his credit agreement, can reasonably be characterized as a penalty for defaulting on the credit agreement, the Board's decision to exclude them from the term "finance charge" is surely reasonable.

*244 In holding that Regulation Z conflicts with § 1605's definition of the term "finance charge," the Court of Appeals ignored our warning that "judges ought to refrain from substituting their own interstitial lawmaking for that of the [Board]." Ford Motor Credit Co., supra, at 568. Despite the Board's rational decision to adopt a uniform rule excluding from the term "finance charge" all penalties imposed for exceeding the credit limit, the Court of Appeals adopted a case-by-case approach contingent on whether an act of default was "unilateral." Putting aside the lack of textual support for this approach, the Court of Appeals' approach would prove unworkable to creditors and, more importantly, lead to significant confusion for consumers. Under the Court of Appeals' rule, a consumer would be able to decipher if a charge is considered a "finance charge" or an "other charge" each month only by recalling the details of the particular transaction that caused the consumer to exceed his credit limit. In most cases, the consumer would not even know the relevant facts, which are contingent on the nature of the authorization given by the creditor to the merchant. Moreover, the distinction between "unilateral" acts of default and acts of default where a consumer exceeds his credit limit (but has not thereby renegotiated his credit limit and is still subject to the over-limit fee) is based on a fundamental misunderstanding of the workings of the credit card industry. As the Board explained below, a creditor's "authorization" of a particular point-of-sale transaction does not represent a final determination that a particular transaction is within a consumer's credit limit because the authorization system is not suited to identify instantaneously and accurately over-limit transactions. Brief for Board of Governors of Federal Reserve System as Amicus Curiae in No. 00-4213 (CA6), pp. 7-9.

Congress has authorized the Board to make "such classifications, differentiations, or other provisions, and [to] provide for such adjustments and exceptions for any class of transactions, *245 as in the judgment of the Board are necessary or proper to effectuate the purposes of [TILA], to prevent circumvention or evasion thereof, or to facilitate compliance therewith." § 1604(a). Here, the Board has accomplished all of these objectives by setting forth a clear, easy to apply (and easy to enforce) rule that highlights the charges the Board determined to be most relevant to a consumer's credit decisions. The judgment of the Court of Appeals is therefore reversed.

It is so ordered.