This is an action for recovery of damages. This counter complaint
is filed and these proceedings are instituted under the Consumer
Credit Protection Act, 15 USC ''1601 et seq. and Title 12 Code of
Federal Regulations, Part 226, regulation Z and X. Jurisdiction of
this court is invoked pursuant to Title 15 USC §§1601, 1640(e).
The credit transaction was rescindable and subject to the disclosure
requirements of Title 15 USC § 1635(a) and Title 12 Code of Federal
Regulations, Section 226.23(a) even though Plaintiff did not waive
their right to retain or acquire a UCC lien on the property. The UCC
lien, nevertheless apply to the transaction under revised Article 9
and to Plaintiff because lien rights on the property arose in favor
of the Plaintiff as a result of the transaction. The Federal
Reserve Board Interpretation, Title 12 Code of Federal Regulations
Part 226, Supplement I, Paragraph 23(a)(1), provides that in such a
situation the transaction is rescindable.
The disclosures made in relation to the consumer credit transaction
were not presented in the manner required by law. The disclosures
were not grouped together and were not segregated from everything
else as required by Title 12 Code of Federal Regulations, Section
226.17(a)(1). Instead, Plaintiff's disclosure statements was
arranged as follows:
(a) Right to rescind or cancel was inside other disclosure
statements and went unsigned by both parties.
(b) The interest disclosures were grouped together with other
information within the documents.
(c) The two required statements under 15 USC §1639(a)(1)(A) and (B)
are completely missing.
(d) Required disclosure statements are completely missing under 15
USC §1638(a)(2)(B) (a)(9), (a)(11) and (a)(12).
The notice of the right to rescind delivered to Defendant by
Plaintiff consisted of a single sheet of paper, and did not include
a form by which Defendant could exercise such right, as required by
Title 12 Code of Federal Regulations, Section 226.23(b)(3).
Since this action was commenced, Plaintiff has continued and so
continues to violate the Consumer Credit Protection Act, Title 15
United States Code, Section 1601 et seq., and Regulation Z, Title 12
Code of Federal Regulations, Part 226, which was adopted pursuant to
such Act, by failing to properly make the disclosures required by
the Act and Regulation Z and X, as herein after more particularly
set forth.
Plaintiff failed to disclose the amount of its finance charge in the
disclosure statement, using the term "finance charge," as required
by Title 12 Code of Federal Regulations, Section 226.7(f).
Plaintiff failed to disclose in or with the disclosure statement
each periodic rate that may be used to compute its finance charge,
the range of balances to which such periodic rate is applicable, and
the corresponding annual percentage rate.
Plaintiff failed to compute in or with the disclosure statement the
annual percentage rate (or rates) of its finance charge as required
by Title 12 Code of Federal Regulations, Section 226.7(g).
Plaintiff failed to disclose in or with the periodic statement the
amount of the balance to which the periodic rate was applied and an
explanation of how that balance was determined and further failed to
disclose the fact that the balance is determined without first
deducting all credits and payments made after acceleration and the
amount of such credits and payments as required by Title 12 Code of
Federal Regulations, Section 226.7(e).
Plaintiff failed to disclose in or with the acceleration statement
the amounts, itemized and identified by type, of charges other than
finance charges debited to the account during the acceleration
period as required by Title 12 Code of Federal Regulations, Section
226.7(h).
Plaintiff failed to disclose the date by which or the time period
within which the new balance or any portion of the new balance must
be paid to avoid additional finance charges as required by Title 12
Code of Federal Regulations, Section 226.7(j).
By reason of the foregoing, Plaintiff has failed to make the
disclosures required by 15 USC §1601 et. seq. and Title 12 Code of
Federal Regulations, Section 226.7, clearly and conspicuously in
writing, in a form that Defendant could keep as required by 15 USC
§1601 et. seq. and Title 12, Code of Federal Regulations, Section
226.5(a)(1).
As a result of Plaintiff’s aforesaid violations, Plaintiff is liable
to Defendant in an amount not less than $2000.00 per violation,
clear title to property with fixtures and cost of litigation, as
provided in Title 15 United States Code, Section 1601 et. seq.
Dated this day of February 2004.
