Walden Realty Company

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IN THE MATTER OF WALDEN RJ;;ALTY COMPANY, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Docket C-'Z,i98. Complaint, July, 1.975 - Decisioll, July UJ7'! Consent order requiring a Lakewood, Colo., mortgage loan broker, among other things to cease violating the Truth in Lending Aet by failing to disclose to consumers, in connection with the extension of consumer credit, such information as required by Regulation Z of the sairl Act. Appearances For the Commission: Tommie W. Wakefield. For the respondents: Victor L. Wallace, Calkins, Krarner Grim-shaw and Harfing, Denver, Colo.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and of the Truth in Lending Act and thc 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 Walden Realty Company, a corporation, and Paul S. Walden, 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 252 Complaint thereof would be in the public interest, hereby issues its complaint Htating ith charges in that respect as follows: PARAGRAPH 1. Respondent Walden Realty Company is a corporation organized, existing and doing bUHineHS under and by virtue of the laws of the State of Colorado, with its principal office and place of business located at 10155 W. Kentucky Dr., Lakewood, Colo. Respondent Paul S. Walden is an officer of the corporate respondent. He formulates, directs and controls the acts and practices of the corporate respondent including the acts and practices hereinafter set forth. His address is the same aH that of the corporate respondent. PAR. 2. Respondents are now, and for some time last past have been engaged in the advertising, offering for sale and sale of housing to the general public.

PAR. 3. In the ordinary 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, respondents, in the ordinary course of business as aforesaid and in connection with credit sales, have caused, and are causing, to be published, advertisements, as "credit sale" and "advertisement" are defined in Section 226.2 of Regulation Z which advertisements aid, promote or assist, directly or indirectly, the extension of other than open end credit.

PAR. 5. Respondents, in certain of the above-mentioned advertisements, have stated and are stating the amount. of the downpayment (in dollars or as a percentage of the sale price) and the period of repayment without also stating, as required by Section 226. 1O(d)(2) of Regulation Z, all the following terms:

(a) the cash price: (the amount of the loan;) (b) the amount of the down payment required or that no down payment is required, as applicable;

(c) the number, amount and due dates or period of payments scheduled to repay the indebtedness if the credit is extended; and (d) the amount of the finance charge expressed as an annual percentage rate.

PAR. 6. Pursuant to Section 103(q) of the Truth in Lending Act respondents' aforesaid failures to comply with the provisions of Regulation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have thereby violated the Federal Trade Commission Act.

2;)4 FEDERAL TRAm: COMMISSION DECISIONS Decision ami Order Rfi F. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of thc respondents named in thc caption hereof, and the respondents having been furnishcd thereafter with a copy of a draft of complaint which the Kansas City Regional Office 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 regulation promulgated thereunder, and the ederal 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 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 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 said 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 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 Walden Realty Company is a corporation organized existing and doing business under and by virtue ofthe laws of the State of Colorado, with its office and principal place of business located at 10155 W. Kentucky Drive, city of Lakewood, State of Colorado. Respondent Paul S. Walden is an offcer of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation, and his principal office and place of business is located at the above-stated address.

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 ordered That respondents Walden Realty Company, a corporation, its successors and assigns, its offcers, and Paul S. Walden and respondents individually and as an officer of said corporation, ), 252 Decision and Order agents, representatives, salesmen and employees, directly or through any corporation, subsidiary, division or other device, in connection with any advertisement to aid, promote or assist, directly or indirectly, any arrangement or extension of consumer credit as "consumer credit" and advertisement" are defined in Regulation Z (12 CFR 9226) of the et seq.Truth in Lending Act (Pub. L. 90-321, 15 U. C. 91601 forthwith cease and desist from:

1. Representing in any such advertisement, directly or by implication, that no downpayment is required, the amount of the downpayment or the amount of any instalment payment, either in dollars or as a percentage, the dollar amount of any finance charge, the number of instalments or the period of repayment, or that there is no charge for credit, unless all of the following items are clearly and conspicuously stated, in terminology prescrihed under Section 226.8 of Regulation Z as required by Section 226.10(d)(2) of Regulation Z: (a) the cash price: (the amount of the loan; (b) the amount of the downpayment required or that no downpayment is required, as applicable;

(c) the number, amount and due dates or period of payments scheduled to repay the indebtedness if the credit is extended: and (d) the amount of the finance charge expressed as an annual percentage rate.

2. Failing, in any advertisement, to make all disclosures as required by Section 226.10 in the manner prescribed by Sections 226. , 226.8 and 226.10 of Regulation Z.

It is further ordered That respondents notify the Commission at least thirty (30) days prior to any proposed change in any 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 i8 further ordered That the individual respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiliation with a new business or employment. Such notice shall include respondent' s current business address and a statement as to the nature of the business or employment in which he is engaged as well as a description of his duties and responsibilties.

It is further ordered That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered That the respondents herein shall within sixty file with the (60) days after service upon them of this order, 25G FEDERAL TRADE COMMISSION DECISIONS Complaint 6 FT.

Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.