Excel Finance Baronne, Inc

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IN THE :YlATTER OF EXCEL FINAKCE BARONKE , I;-C., ET AL.

CONSENT ORDER , ETC. , IN REGARD TO THE ALLEGED VIOLATIONS OFTHE FEDERAL TRADE COMMISSION AKD THE TRUTH II\ LENDING ACTS Docket C-2393. Complai'id, Api'iI27, 1973- Decisioil Apri 1973. Consent order requiring a ::ew Orleans, Louisiana, finance company cngag-ed in the business of lending money to the public and purchasing consumer credit sales contracts arranged by others, among other things to cease violating the Truth in Lending Act by failing to disclose to consumers, in connection with the extension of consumer credit, such information as required by Regulation Z of the said Act. CO:vPLAIKT Pursuant to the provisions of the Truth in Lendin Act and the implementing regulations promulgated thereunder, and the Federal Trade Commission Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Excel Finance Baronne, Inc. , a cor­ poration; Excel Baronne Discount, Inc. , a corporation; Excel Finance :YIid-City, Inc. , a corporation; Ideal Mortgage Cor­ poration, a corporation; X-L Finance Company, Inc. , a cor poration; and A. J. Gumina, individually and as an officer of said corporations, hereinafter sometimes referred to as respon­ dents, have violated the provisions of said Acts and implement­ ing regulations, and it appearing to the Commission that a pro­ ceeding by it in respect thereof would be in the public interest hereby issues its complaint stating its char es in that respect as follows:

EXCEL FIXANCE BARO:\NE, ET AL. 1283 1282 Complaint PARAGRAPH 1. Respondent, Excel Finance Baronne, Inc. , is a corporation organized, existing and doing business under and by virtue ofthe laws of the State of Louisiana, with its principal office and place of business located at 312 Baronne Street, New Orleans, Louisiana.

Respondent, Excel Baronne Discount, Inc., is a corporation organized, existing- and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business located at 312 Baronne Street, K ew Orleans Louisiana.

Respondent, Excel Finance :vid- City, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business located at 4123 Bienville Street, N e",' Orleans Louisiana.

Respondent, Ideal Ivlortgage Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business located at 4123 Bienville Street, Kew Orleans Louisiana.

Respondent, X- L Finance Company, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal offce and place of business located at 101 West Main Street, Houma Louisiana.

Respondent, A. J. Gumina, is an individual and an officer of said corporations. He formulates, directs and controls the policies, acts and practices of said corporations, including the acts and practices hereinafter set forth. His address is Room 200 838 Graviel' Street, New Orleans, Louisiana. PAR. 2. Respondents are now, and for some time last past have been, engaged in the business of lending money to the public and purchasing consumer credit sales contracts arranged by others.

PAR. 3. In the ordinary course and conduct of their business as aforesaid, respondents regularly extend consumer credit as " consumer credit" is defined in Section 22G.2 of Regulation , the implementing regulation of the Truth in Lending Act duly promulgated by the Board of Governors of the Federal Reserve System.

PAR. 4. Subsequent to July 1 , 1969 , respondents, in connection with their extensions of consumer credit, have provided cus­ tomers with consumer credit cost disclosure statements which: 1. Fail to describe the type of any security interest held or 1284 FEDERAL TRADE COMy!ISSlO:\ DECISIO:-S Complaint 82 F.

to be retained or acquired by the creditor in connection with the extension of credit as required by Section 226.8(b)(5) of Regu­ lation Z.

2. Fail to use the term " cash price " as defined in Section 226. 2(i), in a credit sale transaction to describe the purchase price of the item, as required by Section 226.8(c)(1) of Regulation PAR. 5. Subsequent to July J , J 969 , respondents in connection with their extension of consumer credit in transactions in which a security interest is acquired in real property which is used as the principal residence of the customer, and where the cus­ tomer thereby has the right to rescind the transaction as pro­ vided by Section 226.9 of Regulation Z: 1. Failed, in ,Some instances, to provide each customer as defined in Section 226.2(0) and 226.9(f) of Regulation Z with two copies of notice of right to rescind in the form required by Section 226.9(b).

2. Failed, in some instances, to provide each customer as defined in Section 226.2(0) and Section 226.9(b) of Regulation Zwith the disclosures required under Section 226.8 of Regulation PAR. 6. By and through thc acts and practices set forth above respondents failed to comply with the requirements of Regula­ tion Z, the implementing regulation of the Truth in Lending Act, duly promulgated by the Board of Governors ofthe Federal Reservc System. Pursuant to Section 103(q) of the Act, such failure to comply constitutes a violation of the Truth in Lending Act and, pursuant to Section 108 thereof, respondents have vio­ lated the Federal Trade Commission Act. DECISION AKD ORDER The Federal Trade Commission having initiated an investiga­ tion of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the New Orleans Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge rcspondcnts with violation of the Federal Trade Commis­ sion Act; and The respondents and counsel for the Commission having there­ after executed an agreement containing a consent order, an admission by thc respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and JoXCEL FIKA:-CE BARO:\NE , ET AL. 1285 1282 Decision and Order does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s rules, and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respon­ dents have violatcd thc said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agree­ ment on thc public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in Section 34(b) of its rules, the Commission hereby issues its complaint makes thc following jurisdictional findings, and enters the fol­ lowing order:

1. Respondent, Excel Finance Baronne, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business located at 812 Baronne Street, New Orleans Louisiana.

Respondent, Excel Baronne Discount, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business Jocated at 312 Baronne Street New Orleans Louisiana.

Respondent, Excel Finance lVlid- City, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business located at 4123 Bienvillc Street, New Orleans Louisiana.

Respondent, Idcal ;VIortgage Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business located at 4123 Bienville Street, New Orleans Louisiana.

Respondent, X-L Finance Con1pany, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business located at 101 West Main Street, Houma Louisiana.

Respondent, A. J. Gumina, is an individual and an officcr of said corporations. He formulates, directs and controls the policies, acts and practices of said corporations, including the acts and practices hereinafter set forth. His address is Room 200 838 Gravier Street, New Orleans. Louisiana. 2. The Federal Trade Commission has jurisdiction of the sub­ ), Decision and Order 82 F. T. ject matter of this proceeding and of the respondents and the proceeding is in the public interest.

ORDER It is ordered That respondents Excel Finance Baronne, Tnc. a corporation; Excel Baronne Discount, Inc. , a corporation; Excel Finance Mid- City, Inc., a corporation; Ideal :vortgage Cor­ poration, a corporation; X-L Finance Company, Inc. , a cor­ poration, and respondent A. J. Gumina, individually and as an officer of respondent corporations, and their successors and assigns and respondents' officers, agents, representatives and employees, directly or through any corporation, subsidiary, divi­ sion or other device, in connection with the extension of con­ sumer credit as "consumer credit" is defined in Regulation Z (12 C. R. 9 226) of the Truth in Lending Act (Pub. L. 90-321 15 L. C. 1601 et seq. do forthwith cease and desist from: 1. Failingto describe the type of any security interest held or to be retained or acquired by the creditor in connection with the extension of credit, as required by Section 226. 8(b) (5) of Regulation Z.

2. Failing to use the term "cash price " as defined in Section 226.2(i), to describe the purchase price of the mer­ chandise in a credit sale transaction, as required by Sectjon 226. 8(c)(1) of Regulation Z.

t Fajljng in any transaction which respondents retain or acquire a security interest in real property which is used or is expected to be used as the principal residence of the cus­ tomer, jncluding any transaction required by Section 226. (j) of Regulation Z to be treated as a new transaction, to (a) provide each customer, as defined in Section 226.2(0) and 226.9(f) of Regulation Z who has the right provided by Section 226.9 of Regulation Z to rescind the transaction wjth two copies of notice of right to rescind in the form required by Section 226.9(b) of Regulation Z which notice shall identify the transaction to which the right to rescind relates as required by Section 226.9(b) of Regulation Z prior to the consummation of the trans­ actions.

(b) provide each customer, who has the right provided by Section 226.9(a) of Hegulation Z to rescind the trans­ action with a copy of all disclosures required by Section 226.8 thereof, as required by Section 226. 6(e) of Regulation Z prior to the consummation of the transaction. EXCEL FINANCE BARONKE, ET AL. 1287 1282 Decision and Order 4. Failing in any consumer credit transaction or adver­ tisement, to make all disclosures, determined in accordance with Section 226. 4 and Section 226.5 of Regulation Z, at the time and in the manner, form and amount required by Sec tions 226. , 226. , 226. , 226.9 and 226.10 of Regulation Z. It is further orrlered That respondents shall prominently dis­ play no less than two signs on each premise or place at which they do business, which will clearly and conspicuously state that a customer must receive a complete copy of the consumer credit , incost disclosures, as required by the Truth in Lending Act any transaction which is financed, before the transaction is con­ summated.

It is further ordered That respondents deliver a copy of this order to cease and desist to al1 present and future personnel of respondents engaged in the consummation of any extension of consumer credit or in any aspect of preparation, creation or placing of advertising, and that respondents secure a signed statement acknowledging receipt of said order from each such person.

It is f,,,-ther ordered That respondents notify the Commission at least thirty (30) days prior to any proposed change in respon­ dents ' business such as dissolution, assignment or sale result­ ing in the emergence of a successor business, corporation, or otherwise, the creation of subsidiaries, or any other change which may affect compliance obligations arising out of this order.

It is further ordered That respondents herein 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 nature and form of their compliance with this order.

NATIONAL DYKAMICS CORP. , ET AL. 1289 Opinion