State law and your contract govern whether or not you're allowed to collect interest, how, and when. These issues should be discussed with the bank's attorney.
TILA civil liability becomes an issue when you violate Regulation Z. If you are in court litigating a violation, the liability and penalties are set by Section 130(a) of the TILA (15 USC 1640(a)). When a violation is self-discovered (such as your case), you can eliminate the risk of civil liability by following the "cure" procedure outlined in TILA Section 130(b)--HOWEVER--in order to achieve the cure, you must "make whatever adjustments in the appropriate account are necessary to assure that the person will not be required to pay an amount in excess of the charge actually disclosed...." Since you disclosed nothing, collecting any interest would appear to stand between you and a cure.
Finally, violations of Regulation Z are subject to the regulators' Interagency Enforcement Policy on Reg. Z. This policy statement is available from various sources, including online here: https://www.fdic.gov/regulations/laws/rules/5000-300.html.
The bulk of this policy deals with non-disclosure or inaccurate disclosure of the FC and APR, however it's very important for you to note that the policy is triggered by examiner findings of patterns and practices of violations. If this case is truly one-of-a-kind, then the Interagency Policy would not be applicable.
Bottom line: Talk to your attorney about state law, your contract, and the liklihood of beating down a TILA lawsuit by this borrower.