Valley Acceptance Corporation

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IN THE MATTER OF V ALLEY ACCEPTANCE CORPORATION, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLA'nON OF THE FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Doeket C-2665. Complw:nt, May J. 1975 - Decision, May 1., 1.975 Consent order requiring a Roanoke, Va., loan broker, among other things to cease violating the Trth in Lending Ad by failing to disclose to consumers, in connection with the extension of consumer credit, such infonnation as required by Regulation Z of the said Act.

Appearances For the Commission: Bern.ard RouJitz, Alice C. Kellehe and Tlumw.B J. Keary.

For the respondents: Richfl.rd Lee Lawrence Roanoke, Va. COMPLAINT Pursuant to the provisions of the Federal Trde Commssion Act and of the Trth in Lending Act and the implementing regulation promulgated thereunder, and by virue of the authority vested in it by said Acts, the Federal Trade Commssion, having reason to believe that Valley Aeceptanee Corporation, a eorprdtion, and Henry E. Wiesen and Virginia C. Wiesen, individually and a." offcers of said eorpration hereinafter sometimes referred to a." respondents, have violated the provisions of said Acts, and the implementing regulation promulgated under the Trth in Lending Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public VALLEY ACCEPTANCE CORP., ET AI, 871 870 Complaint interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Valley Aceeptance Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the Commonwealth of Virginia with its principal office and place of business located at Colonial American Bank Bldg. Hoanoke, Va.

Respondents Henr E. Wiesen, and Virginia C. Wiesen are officers of the corporate respondent. They formulate, direct and control the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent.

All of the aforementioned respondents cooperate and act together in the earrng out of the acts and practices hereinafter set forth. PAR. 2. Respondents are now, and for some time last past have been, engaged as brokers in the arranging and securng of loans for the general public.

PAR. a. In the ordinary course and eonduet of their business as aforesaid, respondents regularly arange for the extension of consumer credit, as I'consumer credit" is defined in Regulation Z, the implementing regulation of the Trth in Lending Act, duly promulgated by the Board of Governors of the Federal Reserve System. Par. 4. Subsequent to July 1, 1969, in the ordinary course of business as aforesaid respondents' customers are provided with conswner credit cost disclosure statements.

By and through the use of the aforesaid consumer eredit cost disclosures respondents:

1. Fail to include the broker's fee or finder's fee in the determnation of the finance charge, as required by Section 226.4(a)(3) of Regulation Z.

2. ail to disclose the broker's fee or fjnder's fee as a prepaid finance charge, as required by Section 226.8(e)(1) of Reguation Z, using the term "prepaid finance charge " as required by Section 226.8( d)(2) of Reguation Z.

3. Fail to itemie the components of the finance charge, as required by Seetion 226.8(d)(a) of Reguation Z.

4. Fail to disclose aeeurately the annual percentage rate computed in aeeordance with Seetion 226.5(b) of Regulation Z, as required by Section 226.8(b )(2) of Regulation Z.

5. Fail to print the terms "finance charge" and " annual percentage rate" more conspicuously than other terminology, as required by Seetion 226.6(a) of Regulation Z.

6. Fail to disclose clearly the method of computing any unearned Decision and Order 85 F. portion of the finance charge in the event of prepayment of the obligation, as required by Section 226.6(a) of Regulation Z. 7. Fail to identify the broker as a ereditor, as "creditor" is defined in Section 226.2(m) of Reguation Z, as required by Section 226.6(d) of Regulation Z.

8. Fail to make full consumer credit cost disclosures before the transaction is consummated, as required hy Section 226.8(a) of Regulation Z.

PAR. 5. Pursuant to Section 103('1) of the Truth in Lending Act respondents' aforesaid failures to comply with the provisions of Regulation Z constitute violations of the Act and, pursuant to Section 108 thereof, respondents have thereby violated the Federal Trade Commission Aet.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereto with violation of the Federal Trade Commission Aet, and the respondents having been served with notice of said determnation and with a copy of the complaint the Commssion intended to issue, together with a proposed form of order; and The respondents and counsel for the Commssion having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signng of said agreement is for settement 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 considered the agreement and having provisionally accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of sixty (60) days, now in furher conformty with the procedure preserihed in Seetion 2.34(b) of its rules, the Commssion hereby issues its complaint in the form contemplated by said agreement, maes the following jurisdictional findings, and enters the following order: 1. Respondent Valley Aceeptanee Corpration is a corporation organized, existing and doing business under and by viue of the Commonwealth of Virginia, with its offce and principal place of business located at Colonial American Bank Bldg., Roanoke, Va. Respondents Henry K Wiesen and Virginia C. Wiesen are officers of said corporation. They formulate, direct and control the policies, acts ), \lftLo1....l' ft"-''J' O JftH'-.. -" '-JUJU" 1.'" ftl-. 870 Decision and Order and practices of said corporation, and their principal offce and place of business is located at the above stated address. 2. The Federal Trade Commission has 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 Valley Aeeeptanee Corporation, a corporation, its successors and assigns, and its officers, and Henr E. Wiesen, and Virginia C. Wiesen, individually and as officers of said corporation, and respondents' agents, representatives and employees directly or through any corporation, subsidiary, division or other device, in connection with any extension or arrangement for the extension of consumer credit or advertisement to aid, promote or assist directly or indirectly, any extension or arangement for the extension of consumer credit as "conswner credit" and Iladvertisement" are defined in Reguation Z (12 C. R. 9226) of the Trth in Lending Act (Pub.L. 90 321, 15 U. C. 91601 et seq. do forthwith cease and desist from:

1. Failng to include the broker s fee or finder's fee in the determination of the finance charge, as required by Section 226.4(a)(3) of Regulation Z.

2. Failing to disclose the broker's fee or finder'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 required by Section 226.8(d)(2) of Reguation Z.

B. Failing to itemize the components of the finance charge, as required by Seetion 226.8(d)(3) of Reguation Z. 4. Failing to disclose accurately the annual percentage rate computed in aecordanee with Seetion 226.5(b) of Regulation Z, as required by Section 226.8(b)(2) of Regulation Z. 5. Failing to print the term IIImance charge" and uannual percentage rate" more conspicuously than other termnology, required by Seetion 226.6(a) of Regulation Z. 6. Failing to ilsclose clearly the method of eomputing any uneared of theportion of the finance charge in the event of prepayment obligation, as required by Section 226.6(a) of Reguation Z. 7. Failing to identify the broker as a creditor, as "creiltor" is defined in Section 226.2(m) of Regulation Z, as required by Section 226.6(d) of Regulation Z.

8. Failin!' to provide the borrower complete consumer credit east disclosures before consummation of the tran.-;action, as required by Section 226.8(a) of Regulation Z.

511 0 - 76 - .'is Deeision and Order 85 ;' 9. Failing, in any consumer credit transaction or advertisement, to make all disclosures, determined in aceordanee with Sections 226.4 and 226.5 of Regulation Z, in the manner, form and amount required by Sections 226. , 226. , 226.9 and 226.10 of Regulation Z. It is further ardRred That respondents prominently display no less than two signs on the premises which will dearly and conspicuously state that a customer must receive a complete copy of the consumer credit east disclosures, as required by the Trth in Lending Act, in any transaction which is financed, before the transaction is consummated. It is further ardRred That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dissolution, assigrent 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 respondents deliver a copy of this order to cease and desist to all present and future personnel of respondents engaged in the arranging for the extension of consumer eredit, and that respondents secure a signed statement aelrowledging receipt of said order from each such person.

It is further o'rdRred That the individual respondents named herein promptly notify the Commission of the diseontinuanee of their present business or employment.

It is further ardRred That the respondents herein shall within sixty (60) days after servce upon them of this order, fie with the Commission a report, in wrting, setting forth in detai the manner and form in which they have complied with this order.