53638 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices

1These entities and persons are collectively

referred to as ‘‘respondents.’’

owned by the bank holding company,

including the companies listed below.

The applications listed below, as well

as other related filings required by the

Board, are available for immediate

inspection at the Federal Reserve Bank

indicated. The application also will be

available for inspection at the offices of

the Board of Governors. Interested

persons may express their views in

writing on the standards enumerated in

the BHC Act (12 U.S.C. 1842(c)). If the

proposal also involves the acquisition of

a nonbanking company, the review also

includes whether the acquisition of the

nonbanking company complies with the

standards in section 4 of the BHC Act.

Unless otherwise noted, nonbanking

activities will be conducted throughout

the United States.

Unless otherwise noted, comments

regarding each of these applications

must be received at the Reserve Bank

indicated or the offices of the Board of

Governors not later than October 28,

1997.

A. Federal Reserve Bank of

Minneapolis (Karen L. Grandstrand,

Vice President) 250 Marquette Avenue,

Minneapolis, Minnesota 55480-2171:

1. Roscoe Community Bankshares,

Inc., Roscoe, South Dakota; to become a

bank holding company by directly and

indirectly acquiring 100 percent of of

the voting shares of Roscoe Financial

Services, Inc., Roscoe, South Dakota,

and thereby indirectly acquire First

State Bank of Roscoe, Roscoe, South

Dakota.

Board of Governors of the Federal Reserve

System, October 8, 1997.

William W. Wiles,

Secretary of the Board.

[FR Doc. 97–27178 Filed 10–14–97; 8:45 am]

BILLING CODE 6210–01–F

FEDERAL RESERVE SYSTEM

Sunshine Act Meeting

AGENCY HOLDING THE MEETING: Board of

Governors of the Federal Reserve

System.

TIME AND DATE: 11:00 a.m., Monday,

October 20, 1997.

PLACE: Marriner S. Eccles Federal

Reserve Board Building, 20th and C

Streets, N.W., Washington, D.C. 20551.

STATUS: Closed.

MATTERS TO BE CONSIDERED:

1. Status Report of the Committee on

the Federal Reserve in the Payments

Mechanism (Alternative Roles for the

Federal Reserve in the Retail Payments

System).

2. Personnel actions (appointments,

promotions, assignments,

reassignments, and salary actions)

involving individual Federal Reserve

System employees.

3. Any items carried forward from a

previously announced meeting.

CONTACT PERSON FOR MORE INFORMATION:

Mr. Joseph R. Coyne, Assistant to the

Board; (202) 452–3204. You may call

(202) 452–3207, beginning at

approximately 5 p.m. two business days

before this meeting, for a recorded

announcement of bank and bank

holding company applications

scheduled for the meeting.

Dated: October 10, 1997.

William W. Wiles,

Secretary of the Board.

[FR Doc. 97–27506 Filed 10–10–97; 3:09 pm]

BILLING CODE 6210–01–P

FEDERAL TRADE COMMISSION

[File No. 952 3200; et al.]

Suntrup Ford, Inc.; Analysis to Aid

Public Comment, et al.

In the matter of:

File No. 952 3201

Suntrup Buick-Pontiac-GMC Truck, Inc.;

Thomas Suntrup; Analysis to Aid Public

Comment

File No. 952 3204

Lou Fusz Automotive Network, Inc.; Louis

J. Fusz, Jr.; Analysis to Aid Public

Comment

File No. 952 3207

Beuckman Ford, Inc.; Fred J. Beuckman,

III; Analysis to Aid Public Comment

File No. 952 3202

Frank Bommarito Oldsmobile, Inc.; Frank

J. Bommarito; Analysis to Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreements.

SUMMARY: The consent agreements in

these matters settle alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaints that accompany the

consent agreements and the terms of the

consent orders—embodied in the

consent agreements—that would settle

these allegations.

DATES: Comments must be received on

or before December 15, 1997.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W.,

Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

David Medine, Federal Trade

Commission, S–4429, 6th St. and

Pennsylvania Ave., N.W., Washington,

D.C. 20580 (202) 326–3224.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and Section 2.34 of the

Commission’s Rules of Practice (16 CFR

2.34), notice is hereby given that the

above-captioned consent agreement

containing consent orders to cease and

desist, having been filed with and

accepted, subject to final approval, by

the Commission, have been placed on

the public record for a period of sixty

(60) days. The following Analysis to Aid

Public Comment describes the terms of

the consent agreements, and the

allegations in the accompanying

complaints. Electronic copies of the full

text of the consent agreement packages

can be obtained from the Commission

Actions section of the FTC Home Page

(for October 7, 1997), on the World

Wide Web, at ‘‘http://www.ftc.gov/os/

actions97.htm.’’ Paper copies can be

obtained from the FTC Public Reference

Room, Room H–130, Sixth Street and

Pennsylvania Avenue, N.W.,

Washington, D.C. 20580, either in

person or by calling (202) 326–3627.

Public comment is invited. Such

comments or views will be considered

by the Commission and will be available

for inspection and copying at its

principal office in accordance with

Section 4.9(b)(6)(ii) of the Commission’s

Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To

Aid Public Comment

The Federal Trade Commission has

accepted agreements to proposed

consent orders from respondents Lou

Fusz Automotive Network, Inc. and

Louis J. Fusz, Jr. (‘‘respondents Lou

Fusz’’); Frank Bommarito Oldsmobile,

Inc. and Frank J. Bommarito

(‘‘respondents Frank Bommarito’’);

Suntrup Ford, Inc., Suntrup BuickPontiac-GMC Truck, Inc., and Thomas

Suntrup (‘‘respondents Suntrup’’); and

Beuckman Ford, Inc. and Fred J.

Beuckman, III (‘‘respondents

Beuckman’’). 1 The persons named in

these actions are named individually

and as officers of their respective

corporations.

The proposed consent orders have

been placed on the public record for

sixty (60) days for reception of

comments by interested persons.

Comments received during this period

will become part of the public record.

After sixty (60) days, the Commission

will again review the agreements and

the comments received and will decide

whether it should withdraw from the
Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices 53639

2On September 18, 1996, the Board issued

revisions to Regulation M. 61 FR 52,246 (Oct. 7,

1996) (‘‘1996 revisions to Regulation M’’). The

advertising requirements of the October 1996

revisions are to be codified at Section 213.7 of

Regulation M, 12 C.F.R 213.7. Subsequently, on

September 30, 1996, Congress passed revisions to

the CLA Title II, Section 2605 of the Omnibus

Consolidated Appropriations Act for Fiscal Year

1997, Pub. L. No. 104–208, 110 Stat. 3009, 3009–

473 (Sept. 30, 1996) (‘‘revised CLA’’). On April 1,

1997, the Board implemented these statutory

changes in another rulemaking. 62 FR 15,346 (Apr.

1, 1997) (‘‘1997 revisions to Regulation M’’). These

changes are also to be codified at Section 213.7 of

Regulation M, 12 C.F.R 213.7. On April 4, 1997, the

Board adopted a final revised Official Staff

Commentary to Regulation M, 62 FR 16,053 (Apr.

4, 1997) (‘‘Commentary’’). The amendments to the

CLA and the revisions to Regulation M and the

Commentary are optionally effective immediately

and become mandatorily effective on October 1,

1997.

agreement or make final the agreements’

proposed orders.

The complaints allege that each of the

respondents’ automobile lease

advertisements have violated the

Federal Trade Commission Act (‘‘FTC

Act’’), the Consumer Leasing Act

(‘‘CLA’’), and Regulation M. The

complaints also allege that respondents’

credit advertisements have violated the

Truth in Lending Act (‘‘TILA’’) and

Regulation Z, and, in the case of

respondents Frank Bommarito, the FTC

Act. Section 5 of the FTC Act prohibits

false, misleading, or deceptive

representations or omissions of material

information in advertisements. In

addition, Congress established statutory

disclosure requirements for lease and

credit advertising under the CLA and

the TILA, respectively, and directed the

Federal Reserve Board (‘‘Board’’) to

promulgate regulations implementing

such statutes—Regulations M and Z

respectively. See 15 U.S.C. §§ 1601–

1667e; 12 C.F.R Part 213; 12 C.F.R Part

226.2

The complaints against respondents

Lou Fusz, Bommarito, and Suntrup

allege that their lease advertisements

have misrepresented the true amounts

consumers owe at lease inception. The

complaints allege that these companies’

ads represented, based on prominent

statements of ‘‘0 Down,’’ ‘‘No Money

Down,’’ and ‘‘No Payment til April/

March’’ respectively, that consumers

can lease the advertised vehicles

without incurring monetary obligations

at lease inception. This representation is

false, according to the complaints,

because consumers must pay substantial

fees, such as a significant

downpayment, a security deposit, first

month’s payment, and/or other fees to

lease the advertised vehicles. The

complaints also allege that all

respondents (including respondents

Beuckman), based on their prominent

statements about inception fees and/or

prominent statements about a low

monthly payment, have failed to

disclose adequately significant

inception fees in their advertisements.

These practices, according to the

complaints, constitute deceptive acts or

practices in violation of Section 5(a) and

the FTC Act.

The complaints further allege that all

respondents’ lease advertisement have

violated the CLA and Regulation M. The

complaints allege that respondents’ ads

state that amount of any payment, the

number of required payments, or that

any or no downpayment or other

payment is required at consummation of

the lease (‘‘triggering’’ terms under these

laws), but fail to properly state all of the

‘‘triggered’’ terms, as applicable and as

follows: that the transaction advertised

is a lease; the total amount of any

payment such as a security deposit or

capitalized cost reduction required at

the consummation of the lease or that

no such payments are required; the

number, amount, due dates or period of

scheduled payments, and the total of

such payments under the lease; a

statement of whether or not the lessee

has the option to purchase the leased

property and at what price and time (the

method of determining the price may be

substituted for disclosure of the price);

and a statement of the amount or

method of determining the amount of

any liabilities the lease imposes upon

the lessee at the end of the term. These

practices, according to the complaints,

violate the advertising requirements of

the CLA and Regulation M.

These aforementioned violations cite

the version of both the CLA and

Regulation M in effect at the time the

ads ran. Respondents’ alleged practices

of failing to properly disclose inception

fees would also violate the revised CLA,

the 1996 revisions to Regulation M, and

the 1997 revisions to Regulation M, all

of which are currently permissibly

effective and will be mandatorily

effective on October 1, 1997. As

described below, the relief in the

proposed consent orders enjoin

respondents from violating the existing

CLA and Regulation M but also provide

respondents the option of complying

with the revised laws to satisfy this

requirement.

The complaint against respondents

Lou Fusz also alleges that their lease

advertisements have represented that

consumers can lease the advertised

vehicles at advertised terms, including

but not limited to the monthly payment

amount and the amount stated as

‘‘down.’’ This representation is false,

according to the complaint, because

respondents have not offered the

advertised vehicles at such terms. These

practices, according to the complaint,

constitute deceptive acts or practices in

violation of Section 5(a) of the FTC Act.

These practices also violate Section

213.5(a) of Regulation M, 12 C.F.R.

§ 213.5(a), according to the complaint,

which requires that advertisers make

advertised terms ‘‘usually and

customarily’’ available to consumers.

The complaint against respondents

Lou Fusz also alleges that their lease

advertisements promoting a ‘‘one

payment plan have represented that

consumers can lease the advertised

vehicles by making equal monthly

payments for a specified term. This

representation is false, according to the

complaint, because the ‘‘one payment’’

plan requires consumers to make all

payments owed under the lease

agreement at lease signing. These

practices, according to the complaint,

constitute deceptive acts or practices in

violation of Section 5(a) of the FTC Act.

The complaint against respondents

Beuckman also alleges that their lease

advertisements have represented that

consumers can purchase the advertised

vehicles by financing the vehicles

through credit at the advertised monthly

payment and term. According to the

complaint, respondents Beuckman

failed to disclose adequately that the

transaction advertised is a lease.

Specifically, the complaint alleges that

respondents Beuckman failed to

disclose that the term ‘‘RCL’’ is an

abbreviation for ‘‘Red Carpet Lease’’ or

to otherwise disclose that the advertised

monthly payment and term are

components of a lease offer. These

practices, according to the complaint,

constitute deceptive acts or practices in

violation of Section 5(a) of the FTC Act.

The complaints against all of the

respondents allege that their credit

advertisements have violated the TILA

and Regulation Z. The complaints allege

that respondents’ ads state the amount

of percentage of any downpayment, the

number of payments or period of

repayment, and/or the amount of any

payment, but fail to properly state the

following required terms: the amount or

percentage of the downpayment, the

terms of repayment, and/or the annual

percentage rate, using that term or the

abbreviation ‘‘APR,’’ in violation of the

advertising requirements the TILA and

Regulation Z. The complaint against

respondents Suntrup also alleges that

their credit advertisements have

violated the TILA and Regulation Z by

stating a rate of finance charge without

stating that rate as an ‘‘annual

percentage rate,’’ using that term or the

abbreviation ‘‘APR,’’ in violation of the

TILA and Regulation Z.
53640 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices

The complaint against respondents

Frank Bommarito also alleges that their

credit advertisements have represented

that consumers can purchase the

advertised vehicles at the terms

prominently stated in the ad, such as

the monthly payment, annual

percentage rate (‘‘APR’’), and amount

stated as ‘‘down.’’ This representation is

false, according to the compliant,

because consumers must also pay a final

balloon payment of several thousand

dollars to purchase the advertised

vehicles. These practices, according to

the complaints, constitute deceptive

acts or practices in violation of Section

5(a) of the FTC Act.

The proposed consent orders contain

provisions designed to remedy the

violations charged and to prevent the

respondents from engaging in similar

acts and practices in the future.

Specifically, the proposed orders

prohibit respondents, in any lease

advertisement, from misrepresenting the

costs of leasing a vehicle, including but

not limited to the total amount due at

lease inception. The proposed orders

also prohibit respondents, in any lease

advertisement, from stating any amount

due at lease inception or that no such

amount is required, not including a

statement of the periodic payment,

unless the advertisement also states

with ‘‘equal prominence’’ the total

amount due at lease inception. This

‘‘prominence’’ requirement for lease

inception fees also is found in the

Board’s 1996 and 1997 revisions to

Regulation M.

The proposed orders also require

respondents, in any advertisement that

states the amount of any payment, the

number of required payments, or that

any or no downpayment or other

payment is required at consummation of

the lease, to also state clearly and

conspicuously all of the terms required

by Regulation M, as applicable and as

follows: that the transaction advertised

is a lease; the total amount of any

payment such as a security deposit or

capitalized cost reduction required at

the consummation of the lease, or that

no such payments are required; the

number, amounts, due dates or periods

of scheduled payments, and the total of

such payments under the lease; a

statement of whether or not the lessees

has the option to purchase the leased

property and at what price and time (the

method of determining the price may be

substituted for disclosure of the price);

and a statement of the amount or

method of determining the amount of

any liabilities the lease imposes upon

the lessee at the end of the term and a

statement that the lessee shall be liable

for the difference, if any, between the

estimated value of the leased property

and its realized value at the end of the

lease term if the lessee has such

liability. For all lease advertisements,

the proposed orders permit respondents

to comply with this provision by

utilizing applicable provisions of the

revised CLA and the 1996 and 1997

revisions to Regulation M. The orders

set out for each media which provisions

of such revised laws are applicable.

The proposed order for respondents

Lou Fusz also prohibits these

respondents from stating specific lease

terms unless respondents usually and

customarily lease or will lease a vehicle

at those terms. This proposed order also

prohibits respondents Lou Fusz from

misrepresenting the type of transaction

advertised, including but not limited to

the fact that the offer is for a one

payment lease.

The proposed order for respondents

Beuckman also prohibits these

respondents from stating the term

‘‘RCL’’ without disclosing clearly and

conspicuously that such term refers to a

lease transaction.

With regard to respondents’ credit

advertisements, the proposed orders

require that any advertisement that

states the amount or percentage of any

downpayment, the number of payments,

the amount of any payment, or the

amount of any finance charge must also

state clearly and conspicuously all of

the terms required by the TILA and

Regulation Z, as applicable and as

follows: the amount or percentage of the

downpayment; the terms of repayment;

and the annual percentage rate, using

that term or the abbreviation ‘‘APR.’’ If

the APR may be increased after

consummation of the credit transaction,

that fact must also be disclosed. The

proposed order for respondents Suntrup

also prohibits these respondents from

stating a rate of finance charge without

stating the rate as an ‘‘annual percentage

rate’’ or the abbreviation ‘‘APR.’’

The proposed order for respondents

Frank Bommarito prohibits these

respondents, in any credit

advertisement, from misrepresenting the

terms of financing a vehicle, including

but not limited to the amount of any

balloon payment. This proposed order

also prohibits respondents Frank

Bommarito from stating the amount of

any payment or the amount or

percentage of any downpayment or

amount ‘‘down’’ if any advertisement

unless these respondents also state the

amount of any final balloon payment

prominently and in close proximity to

the most prominent of the above

statements.

The proposed orders also prohibit all

respondents from failing to comply in

any other respect with the CLA and

Regulation M and the TILA and

Regulation Z. The proposed order

permits respondents to comply with

other requirements of existing

Regulation M, 12 C.F.R. § 213 by

utilizing the 1996 and 1997 revisions to

Regulation M, as amended.

The purpose of this analysis is to

facilitate public comment on the

proposed orders, and it is not intended

to constitute an official interpretation of

the agreements and proposed orders or

to modify in any way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 97–27228 Filed 10–14–97; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File Nos. 9723141 and 9523098]

Volkswagen of America, Inc., and

Toyota Motor Sales, U.S.A., Inc.;

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: The consent agreements in

these matters settle alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaints that accompany the

consent agreements and the terms of the

consent orders—embodied in the

consent agreements—that would settle

these allegations.

DATES: Comments must be received on

or before December 15, 1997.

ADDRESSES: Comment should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

David Medine, Federal Trade

Commission, S–4429, 6th St. and

Pennsylvania Ave., NW., Washington,

DC 20580. (202) 326–3224.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and § 2.34 of the Commission’s rules

of practice (16 CFR 2.34), notice is

hereby given that the above-captioned

consent agreement containing consent

orders to cease and desist, having been

filed with and accepted, subject to final

approval, by the Commission, have been

placed on the public record for a period

of sixty (60) days. The following

Analysis to Aid Public Comment

describes the terms of the consent

agreements, and the allegations in the