Bellevue Loan Co

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

IN THE MATTER OF BELLEVUE LOAN COMPANY, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUT IN LENDING ACTS Docket C-2630. Complaint, Jan. , 1975 - Deciion, Jan. , 1975 Consent order requig a Newprt, R.I., moneylender in connection with financing insurance premiums, among other thiJr to ceas violating the Truth in Lending Act by failing to disclose to .consumers, in connection with the extension of consumer credit, such information as required hy Regulation Z of the said Act.

Complaint 85 F.

Appearances For the Commission: William P. McDonough. For the respondents: Moore, Virgigadarr, Boyle Lynch Newport COMPLAINT Pursuant to the provisions of the Truth in Lending Act and the implementing regulation promulgated thereunder, and the Federal Trade Commission Act, and by virue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Bellevue Loan Company, a corporation, and Frank Heffernan, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and implementing regulation, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent Bellevue Loan Company is a corporation organized, existing and doing business under and by virtue of the laws of the State of Rhode Island and Providence Plantations, with its principal offce and place of business located at a9 Bellevue Ave. Newport, R.I.

Respondent Frank Heffernan is an offcer of the corponlte respondent. He formulates, directs and controls the policies, acts and practices of the corporation, including the acts and practices herein after set forth. His address is the same as that of the corporate respondent.

PAR. 2. Respondents are now, and for some time last past have been engaged in the business of lending money to the public in connection with the financing of insurance premiums.

PAR. 3. In the ordinary course and conduct of their business as aforesaid, respondents regularly extend, and for some time last past have regularly extended consumer credit, as "consumer credit" is defined in Regulation Z, the implementing regulation of the Truth in Lending Act, duly promulg-dated by the Board of ('..vernors of the Federal Reserve System.

PAR. 4. Subsequent to .July 1, 1969, respondents in the ordinary coure of business as aforesaid, have caused and are causing to be extended consumer credit as "consumer credit" is defined in Regulation , and have caused and are causing customers to execute a premium finance agreement, hereinafter referred to as the "agreement." Respondents do not provide these customers with any other consumer credit cost disclosures.

BELLEVUE LOAN CO., ET AL. 119 147 Decision and Order By and through the use of the agreement, respondents: 1. Failed in some instances to disclose the annual percentage rate accurately to the nearest quarter of one percent, computed in accordance with the provisions of Section 226.5 of Regolation Z, as required by Section 226B(b)(2) of Regolation Z. 2. Failed to use the term "cash price," as defined in Section 226.2(i) of Regolation Z, to describe the purchase price of the transaction, as required by Section 226.8(c)(l) of Regolation Z. 3. Failed to use the tenn "unpaid balance of cash price" to describe the difference between the cash price and the total downpayment, as required by Section 226.8(c)(3) of Regolation Z. 4. Failed to use the term " finance charge" to describe the sum of all charges as required by Section 226.4 of Regolation Z to be included therein, as required by Section 226.8(c)(8)(i) of Regolation Z. 5. Failed to print the term "finance charge" more conspicuously than other required terminology, as required by Section 226.6(a) of Regolation Z.

6. Failed to make the disclosures required by Section 226.8 of Regulation Z clearly, conspicuously and in a meaningful sequence, as required by Section 226.6(a) of Regolation Z. PAR. 5. Pursuant to Section 103(q) of the Trth in Lending Act respondents' aforesaid failures to comply with the provisions of Regolation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have thereby violated the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation 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 Boston Regional Offce proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Truth in Lending Act and the implementing regolation promulgated thereunder and violation of the Federa Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jursdictional facts set forth in the aforesaid draft of complaint, a statement that the signg of such agreement is for settlement puroses only and 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 rules; and Decision and Order 85 F.

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformty with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Bellevue Loan Company is a corporation organized existing and doing business under and by virtue of the laws of the state of Rhode Island and Providence Plantations with its principal offce and place of business located at 39 Bellevue Ave., Newport, R.I. Respondent Frank Heffernan is an offcer of said corporation. He fonnulates, directs and controls the policies, acts and practices of said corporation, including the acts and practices hereinafter set forth. His address is the same as that of said corporation. 2. The Federal Trade Commission ha., jursdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents Bellevue Loan Company, a corporation, its successors and assigns, and its officers, and Frank Heffernan individually and as an officer of said corporation, and respondents agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with any extension of consumer credit or advertisement to aid, promote or assist directly or indirectly any extension of consumer credit, as "consumer credit" and "advertisement" are defined in Regulation Z (12 C. C. 9601 9226) of the Truth in Lending Act (Pub. L. 90-321, 15 U. seq. ) do forthwith cease and desist from: 1. Failing to disclose the annual percentage rate acclidtely to the nearest- quarter of one percent, computed in accordance with the provisions of Section 226.5 of Regulation Z, as' required by Section 226.8(b)(2) of Regulation Z.

2. Failing to use the term "cash price," as defined in Section 226.2(i) , a., of Regulation Z, to describe the purchase price of the trdnsaction required by Section 226.8(c)(l) of Regulation Z. 3. Failng to use the term "unpaid balance of ca.9h price" to describe the difference between the cash price and the total down payment, as required by Section 226.8(c)(3) of Regulation Z. 4. Failing to use the term "finance charge" to describe the sum of HELLEVUE LUAN cu., l!T Ai.. Ibl 147 Decision and Order all charges required by Section 226.4 of Reguation Z to be included therein, as required by Section 226.8(c)(8)(i) of Regulation Z. 5. Failing to print the term "finance charge" more conspicuously than other required termnology, as required by Section 226.6(a) of Reguation Z.

6. Failing to make all disclosures required by Section 226.8 of Regulation Z clearly, conspicuously and in a meaningful sequence, as required by Section 226.6(a) of Regulation Z. 7. Failing in any consumer credit transction or advertisement to make all disclosures determined in accordance with Sections 226.4 and 226.5 of Regulation Z at the time and in the manner, form and amount required by Sections 226. , 226.8 and 22.10 of Regulation Z. It is further ordered That respondents deliver a copy of this order to cease and desist to all present and futur personnel of respondents now or hereafter engaged in the consumtion of any extension of consumer credit or in any aspect of the prepartion, creation or placing of advertising, and that respondents secur a signed statement acknowledging receipt of said order from each person. It is further arred That respondents notify the Commssion at least thirty (30) days prior to any proposed change in the corporate respondent, such M dissolution, Msignment or sale resulting in the emergence of a successor corpration, the creation or dissolution of subsidiaries, or any other change in the corpration which may affect compliance obligations arising out of the order. It is furthe ordered That the respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiiation with a new business or employment. Such notice shall include respondent's curnt business address and a statement as to the nature of the business or employment in which he is eng-aged as well as a description of hi duties and responsibilities. It is further orered That the respondents herein shall, within sixty (60) days after servce upon them of this order, fie with the Commssion a report, in wrting, setting forth in detal the maner and form in which they have complied with this order. Complaint 85 F.