Bussy Enterprises, Inc

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IN THE MATTER 0.' BUSSY ENTERPRISES, INC., ET AL.

CONSENT ORDER , ETC., IN REGARD TO ALLEGED VIOLATION OF Tile FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Dockel '2fi56. Complaint, Apr. 1.97,'- Decision, Apr. , 1.975 Consent order requiring a La Mesa, Calif., mortgage brokerage business, 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. Appearances For the Commission: George J. Gregores. For the respondents: Pro se.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and of the Truth in Lending Act, and the implementing regulation promulgated thereunder, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Bussy Enterprises, Inc., a corporation doing business as Valley Mortgage Service, and Riehard F. Bussy, individually and as an officer of said corporation, hereinafter sometimes referred to as respondents have violated the provisions of said Acts, and the implementing regulation promulgated under the Truth in Lending Act, 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 Bussy Enterprises, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of California with its principal office and place of business located at 8341 Lemon Ave., La Mesa, Calif. Respondent Richard F. Bussy is an individual and officer of the corporate respondent. In that capacity, he formulates, directs, and controls the acts and practices hereinafter set forth. His business 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 arranging for the extension of credit through the operation of a mortgage brokerage business, which generally arranges, for a fee for inveslors to lend money to consumers using real property as security for the performance of the obligation arising out of the transaction.

, DU;:;: I !:;J:r l\l;:r..;:U"!.. i\L. 79G Complaint PAR. 3. In the regular course and conduct of their business as aforesaid respondents regularly arrange for the extension of consumer credit or offer to extend or arrange for the extension of such credit as arrange for the extension of credit" and "consumer credit" are defined in Section 226.2 of Regulation Z, 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 , in arranging for consumer credit, respondents have failed to comply with the disclo ure requirements of the Truth in Lending Act as defined and: set forth in Regulation Z in that respondents have:

(a) Failed to make the required disclosures clearly, conspicuously, and in meaningful sequence, as prescribed by Section 226.6(a) of Regulation Z.

(b) Failed to retain evidence of compliance with the provisions of Regulation Z, for a two year period as prescribed by Section 226.6(i) of Regulation Z.

(c) Failed to provide the borrower with complete consumer credit cost disclosures before consummation of the transaction, as required by Section 226.8(a) of Regulation Z.

(d) Failed to set forth the finance charge expressed as an annual percentage rate, using the term "annual percentage rate " as prescribed by Section 226.8(b)(2) of Regulation Z.

(e) Failed to set forth the number, amount, due dates or periods of payments scheduled to repay the indebtedness and the sum of such payments using the term total of payments " and to identify the amount of' any "balloon payment" and state the conditions, if any, under which a "balloon payment" may be refinanced if not paid when due, as prescribed by Section 226.8(b)(3) of Regulation Z. (f) Failed to disclose the amount, or method of computing the amount, of any default, delinquency, or similar charges payable in the event of late payments, as prescribed by Section 226.8(b)(4) of Regulation Z.

(g) Failed to disclose and itemize all charges which are included in the amount of credit extended hut which are not part of the finance charge using the term "amount financed " as prescribed by Section 226.8(d)(1) of Regulation Z.

(h) Failed to disclose the broker s fee as a prepaid finance charge, as required by Section 226.8(e)(1) of Regulation Z, using the term "prepaid finance charge " as prescribed by Section 226.8(d)(2) of Regulation Z. (i) Failed to disclose and itemize the total amount of the finance charge using the term "finance charge " as prescribed by Section 226.8(d)(3) of Regulation Z.

79R FEDERAL TRADE COMMISSION DEC18lon8 Decision and Order R5 FTC.

PAR. 5. By the aforesaid failure to make disclosures and retain evidence of compliance, respondents have failed to comply with the requirements of Regulation Z, the implementing Regulation of the Truth in Lending Act, duly promulgated by the Board of Governors of the Federal Reserve System. Pursuant to Section 103(q) of the Truth in Lending Act, respondents' aforesaid failure to comply with Regulation Z constitutes 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 anrlpractices 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 Los Angeles Regional Office proposed to present to the Commission for its consideration and which if issued by the Commission, would charge the respondents with violation of the Federal Trade Commission Act, and of the Truth in Lending Act and the implementing regulation promulgated thereunder; 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 jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such complaint and waivers and other provisions as required by the Commission rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the Act, 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 conformity with the procedure prescribed in Seetion 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Bussy Enterprises, Inc. is a corporation organized existing and doing business under and by virtue of the laws of the State of California, with its office and principal place of business located at 8341 Lemon A ve., La Mesa, Calif.

Proposed respondent Richard F. Bussy is an officer of the corporate respondent. He formulates, directs and controls the policies, acts and ,), t'u;:;:y J1;NIt'_,!(tih;:t.;: , INC., t.'1 AL. 7906 Decision and Order practices of the corporate respondent. His business is the same as that ofthe corporate respondent.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is onlered That respondents Bussy Enterprises, Inc., a corpora tion, its successors and assigns, and its officers, and Richard F. Bussy, 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 arrangement, offer to arrange, extension or advertisement of consumer credit, as "consumer credit" and "advertisement" are defined in Regulation Z (12 CFR 9226) of the Truth in Lending Act (Pub.L. 90- 321 15 U. C. 91601 et seq. do forthwith cease and desist from: 1. Failing to make the required disclosures clear;ly, conspicuously, and in meaningful sequence, as prescribed by Section 226.6(a) of Regulation Z.

2. Failing to provide the borrower with complete consumer credit cost disclosures before consummation of the transaction, as required by Section 226.8(a) of Regulation Z.

3. fI ailng to set forth the finance charge expressed as an annual percentage rate, using the term "annual percentage rate " as prescribed by Section 226.8(b)(2) of Regulation Z.

4. Failnz to set forth the number, amount, due dates or periods of payments scheduled to repay the indebtedness and the sum of such payments using the term total of payments " and to identify the amount of any "balloon payment" and state the conditions, if any, under which a "balloon payment" may be refinanced if not paid when due, as prescribed by Section 226.8(b)(3) of Regulation Z. 5. Failing to disclose the amount, or method of computing the amount, of any default, delinquency, or similar charges payable in the event of late payments, as prescribed by Section 226.8(b)(4) of Regulation Z.

6. Failing to disclose and itemize all charges which are included in the amount of credit extended but which are not part of the finance charge, using the term "amount financed " as prescribed by Section 226.8(d)(l) of Regulation Z.

7. Failing to disclose the broker s fee as a prepaid finance charge as required by Section 226.8(e)(1) of Regulation Z, using the term "prepaid finance charge " as prescribed by Section 226.8(d)(2) of Regulation Z. 8. Failing to disclose and itemize the total amount of the finance HOO FEDERAL TRADE COMMISSION DECISIONS Decision and Order 85 F :r. charge using the term "finance charge " as prescribed by Section 226.8(d)(3) of Re!'ulation Z.

9. Failng, in any consumer credit transaction to make all disclosures, determined in accordance with Sections 226.4 and 226.5 of Regulation Z, in the manner, form and amount required by Sections 226. 226. 226. , and 226.10 of Hegulation Z. It is further ordered That the respondent corporation shall establish for alland maintain a file of copies of relevant executed documents. future and post-Jan. 1 , 1974, loan transactions, for inspection and ofreview upon request by the Federal Trade Commission for a .period three years following the date of execution of the documents. Such Disclosuredocuments shall include copies of the Truth in Lending F arm, Promissory N Dtes, Notice of Right of Rescission, and EscrowInstructions. It is further ordered That respondents deliver a copy of this order to cease and desist to aU present and future personnel of respondents preparation or execution of consumerengaged in the computation, credit documents or in any aspects of preparation, creation, or placing a signed statementof advertising, and that respondents secure acknowledging receipt of said order from each person. It is further ordered That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. That respondents notify the Commission at It is further ordered least thirty (30) days prior to any proposed change in the corporate respondent, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order. It is further ordered That the respondents herein shall within sixty them of this order, file with the (60) days after service upon Commission a report, in writing, setting forth in detail the manner and form in which they have eomplied with this order. BUDGET SERVICE CO. ROI 801 Complaint