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BOARD OF GOVERNORS FEDERAL RESERVE SYSTEM office Correspondence To Mr. Eccles FrQtn D a t e September Subject: Mr» Carpenter \fhen the Board indicated approval of the proposal by Mr- Evans to have an informal staff committee to work with him on Regulation W matters, he stated that memoranda of his conferences with the committee would be kept and sent to the members of the Board so that they could be informed of the matters being considered and the decisions reached. It has not been necessary to circulate the memoranda relating to previous discussions of the group because the matters considered were brought up at meetings of the Board or otherwise brought to the Board's attention. The group met this morning and there is attached for your information a memorandum of the matters discussed at that time. Attachment Record of Discussions of Informal Group Selected to Consider Questions Relating to the Regulation toy the Board of Consumer Instalment Credit s, Evans, Leonard, Carpenter, Brown, and Solonon met in Mr* KfMLS' office at 9*30 a«m« on Wednesday, September 22, 194$ • Mr. Evans stated that the only material criticism of Regulation W that was aade to him on his recent trip related to section 6(g) which requires a down payment in connection with the delivery of a listed article on approval, on trial, or as a demonstrator* The question whether any ofeange should be Bade in this provision was discussed but no decision was reached, Mr. Ivans reviewed 'briefly the discussion, of B&gul&tiori V at the meeting of the Board and t c Federal Advisory Council yesterday. ft In connection with questions raised bj Mr« Leonard, the following decision© were reached3 1. That when §j| inquiry regarding Regulation ¥ is received. fron a Federal B® serve Brar.ch territory, the inquiry will be re~ ferred directly to the Branch for handling, unless it is of MMfc a character, or for some other reason it is felt, that it should be referred to the head office or handled by the Board# 2. That the Federal Reserve B j t i should be asked to use etk a uniform text in the identification certificates furnished to Regulation V investigators, 3. That while the Federal Reserve B&nks furnish speakers on Regulation ¥ in their respective districts, there was no reason vhy the Board should, -not furnish speakers In response to reasonable requests in the Washington area including, possibly, Baltimore* Mr. Leonard stated that he h&i furnished to Chairia&n MeC&be a couple of paragraphs -which .light be included in any talk that the Chsir?mn sight make at the annual convention of the National Association of State Bank Supervisors at Louisvilley Kentucky, and that the paragraphs requested the support of Regulation ¥ fcy the Supervisors and tiiet they k@ep in touch vith the Federal Reserve Banks in order that they might be kept up to date vith respect to developments in connection witn the ^Regulation, Mr, Leonard stated that be was submitting today a reeomniendation ttiat Mr. Bale Lewis, of the federal jfieserve Bank of St. Louis, " e appointed Chief of the Regulation V Section 01 the Division of 3ank b Operations and. that it was expected that if the c^ppointmerit is approved Mr. Leids will I H M M His new duties effective October 6. Mr, Leonard also said tiiat he had mad© arrangements with the Federal EeaerTe Bank of Chicago to have Mr. £• A» Heath, Assistant Cashier and Assistant Secretary$ come to Waeliingteii for • couple of weeks in the interim l>e~ fore Mr» Lewis assumes hie new duties* There followed a discussion of the coisumnieaiione received by the Board in. response to the notice publishec in tct Federal Banister fb with respect to proposed lanbftMats to Regulation ¥ whieii would (l) include in the terms of t i Regulation repair and moderaisation loans ie and (2) render unenforceable contracts vrhieh did not comply with the provisions 01 the Kegul&tion. Mr. Brown stated th&t the responses on the first amendment were predominantly opposeo and he outlined his thinking up to the present tizas as to the manner in vhlcfe repair and modernisation loans might be included la the Regulation. It > a his suggestion that a tentative *g draft of amendment to the regulation be sent to the Federal Reserve Banks for their consideration prior to discuesion at the Conference with representatives of the Federal Reserve Banks which if to be held in Washington on Oetoijer 7 and 8, 1948. He pointed out that the inclusion of such loans in the Regulation would require special treatment and probably would call for an entirely separate .section in the Regulation. He also said tbat the matter was sufficiently difficult and important to Mdfct it desirable for the Board to discuss the proposal vlth the trade vhen it is n & more definite fore*ttkdbefore any action Is taken by t c Board to amend the Regulation. The* procedure outlined ft by Mr, l P f B with respect to the proposed amendment M M approved, afM Mr, Solomon stated that the responses in connection with the amendment regarding enforeeability of contracts, with few exceptions, w r e all opposed to the amendment. In response to an. inquiry from Mr» Evans, Mr* Solomon expressed the opinion th&t it would be a very serious mistake on the part of the Board to adopt the amendment and Mr* Evans stated that he would prefer to take no action on the amendment at least for the time being. In connection with the Conference with representatives of •the Federal Reserve Banks on October 7 and 8, Mr* BroKii stated that it would " e his suggestion that the Federal Reserve Banks be advised promptly b of the'general topics to be discussed at the Conference and t ; . t they be ." a asked, for their suggestions as to particular topics that they -would like to have discussad. It was agreed that a telegram he sent to the Re- serve Banks as suggested by Mr« feNMU In response to ta inquiry frost Mr. Evans as to the statements to be made at the Conference with representative© of the Federal Reserve Banks, it v&s suggested by the staff that he .make the opening stateM R t in "which he would outline vn&t the Board WB.S trying to accomplish through Regulation W and the policy of the Board on the question of enforcement and other important points. It was also agreed that ChairM M McOab® should be asked to address the Conference and that it flight be desirable to have assignments made of persons to lead the discussion on various questions on the agenda, Mr.ftrowireferred to the telegram sent to tae Federal Reserve Banks on September 2, 1943, outlining considerstions which should be borne in mind in determining "whether contracts initiated before, but not completed until after, September 20 should be regarded as being covered 'by Faguiation V, Mr» B t ' W stated that suggestions had heen t-OI Hbdsttfctit vould be helpful If the Board would publish something on this ooint, t n it M M agreed that the staff would prepare a draft of id statement which might be released after approval by the Board.. Mr, Solomon raised the question \ðer the Board should initiate discussions vit'h the trade of legislation vhich mijht continue beyond June 30, 1949, the authority of the Beard to regulateconsumer -5instalsient credit, I t being ids tliought that if a form of b i l l could be prepared vhich would have the support of the trade, i t would have 2 mich better eiinc » of bt&ag approved by the Congress. discussed tut no conclusions were reached. This poijat was
