Lester S. Cotherman

Text (OCR of the scan at left; may contain errors)

In THE Marrer or LESTER 8S. COTHERMAN, ET AL.

MODIFIED ORDER, ETC,., IN REGARD TO THE ALLEGED VIOLATION OF: THE FEDERAL TRADE COMMISSION ACT Docket 8723. Complaint, Dec. 8, 1966—Decision, Jan. 29, 1970 Order modifying an earlier order dated February 19. 1968, 73 FVE.C. 376; pursuant to a decision of the Court of Appeals, Fifth Circuit, dated October: 8, 1969, 417 F.zd 587 (8 S.&D. 1008), which prohibited a mortgage loan company and its officers from misrepresenting the terms and conditions of its loans by clarifying certain parts of the order which the Court held to be toe broad.

Orpen Mopiryine Orprr tro Crease anp Desist Respondents Lester S. Cotherman and William F. Sullivan having fied in the United States Court of Appeals for the Fifth Circuit a petition for review of the order to cease and desist issued herein on rebruary 19, 1968 [75 F.T.C. 876]; and the court en October 3, 1969 [8 S.&D. 1008], having issued its opinion and entered its judgment aflirming the Commission’s finding of violation of Section 5 of the Federal Trade Commission Act, but remanding the case to the Commission for it to clarify and modify the order to cease and desist: Now, therefore, it is hereby ordered, That the aforesaid order of the Commission to cease and desist be, and it hereby is, modified in accordance with the said opinion and judgment of the court of appeals to read as follows:

It is ordered, That respondents Lester S. Cotherman, individually and as General Manager of Consolidated Mortgage Company, and William ¥F. Sullivan, individually and as an officer of Consolidated Mortgage Company, and said respondents’ agents, representatives and employees, directly or through any corporate or other device, in connection with the cffering of or the sale or granting of lending services, or of any similar or related services, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

(a) Representing, directly or by implication, that loans are made to customers at a six-percent rate of interest, or that loans Modified Order 77 F.C.

made or arranged by respondents are repayable over a fifteenyear period, or that loans are made at any stated repayment schedule, interest rates, period of repayment or under other stated terms or conditions:

Provided, however, That it shall be a defense under this subparagraph in any enforcement proceeding instituted hereunder for respondents to establish that loans are readily and in the regular course of business made available to customers under the stated repayment schedule, interest rates, period of repayment of or other terms or conditions as stated ;

(b) Misrepresenting in any manner the monthly repayment schedules, interest rates, periods of repayment or other terms or conditions under which respondents’ loans are made. It is further ordered, That respondents, Lester S. Cotherman, individually and as General Manager of Consolidated Mortgage Company, and William F. Sullivan, individually and as an officer of Consolidated Mortgage Company, and said respondents’ agents, representatives and employees, directly or through any corporate or other device, in connection with the offering of or the sale or granting of lending services, or of any similar or related services, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist, in those cases where representations are made as to the terms and conditions of respondents’ loans, from failing, clearly and conspicuously, to reveal in advertising :

(a) The period of repayment;

(b) The number of payments required ;

(c) The finance charges expressed in terms of dollars and cents ;

(d) The simple annual percentage rate or rates at which the finance charge has been imposed on the monthly balance; (e) Any other charges or expenses which are to be incurred or paid by the borrower to obtain such loans. [t is further ordered, That respondents, Lester S. Cotherman and William F. Sullivan, shall, within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with the order to cease and desist set forth herein. BALSA ECUADOR LUMBER CORP., ET AL. 83 Complaint