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office Correspondence
To Mr. Eccles

D a t e September

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.


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*


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.
In connection with questions raised bj Mr« Leonard, the following decision© were reached3

That when §j| inquiry regarding Regulation ¥ is received.

fron a Federal B® serve 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#

That the Federal Reserve B j t i should be asked to use

a uniform text in the identification certificates furnished to
Regulation V investigators,

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,


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
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
with respect to proposed lanbftMats to Regulation ¥ whieii would (l)
include in the terms of t i Regulation repair and moderaisation loans
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

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
by Mr, l P f B with respect to the proposed amendment M M approved,
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

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
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
statement which might be released after approval by the Board..
Mr, Solomon raised the question \&ether 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