The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
S-377, 378 Reg. W 3 4 5 BOARD OF GOVERNORS OF THE FEDERAL. RESERVE SYSTEM INTERPRETATION OF LAW OR REGULATION October 17, 1941 W-IOO. The Boated has been asked whether the following pro- cedure complies with section 4(f) of Regulation Vi. The seller gives no statement of the transaction to the purchaser but authorizes the finance company which discounts the obligation to furnish the statement to the purchaser in its normal- course of business, with the result that the purchaser receives the statement approximately two weeks after the obligation is discounted by the finance company. • The Board replied that this procedure does not comply with the requirements of section 4(f), » W-101. Regulation W does not prohibit the rescission of an instalment sale contract by agreement of the parties at any time if the * seller refunds all amounts received and the purchaser returns the article; as, for example, where the article is found to be defective and the ••t ^ seller is unable to replace it. However, if the purchaser returns the article several months after the date of sale on the ground that it is defective and if the seller does not replace the article but instead agrees with the purchaser to rescind the sale and sell the purchaser another article of the same kind or a similar article of a higher price, these facts may indicate that the rescission was merely a formality used for the purpose of evading the Regulation and that the transaction should have been treated as a trade-in as described in W-71.
@FedFRASER