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380 S-146 Reg. D - l l INTERPRETATION OF L W O REGULATION A R v (Copies t o be s e n t t o a l l Federal Reserve banks) 1 March 1 , 1939. Mr. E. H. Gough, Deputy Comptroller of t h e Currency, Washington, D. C. Dear Mr. (tough: T h i s r e f e r s t o your l e t t e r of February 1 , 1939, r e g a r d i n g the r e q u e s t o f t h e N a t i o n a l ________ Bank o f . . . f o r a d v i c e a s t o the proper method o f r e p o r t i n g repayments on i n s t a l l m e n t l o a n s . T h i s q u e s t i o n a r i s e s i n c o n n e c t i o n w i t h t h e r e v i s e d form of c o n d i t i o n report and, a s s t a t e d i n your l e t t e r , a l s o i n v o l v e s r e p o r t s f o r t h e purpose of computing r e s e r v e s * I t i s understood from your l e t t e r and from i n f o r m a t i o n f u r n i s h e d by the F e d e r a l Reserve Bank of ____________ t h a t t h e N a t i o n a l ________ Bank makes l o a n s which are payable i n i n s t a l l m e n t s ; t h a t when payments are r e c e i v e d a memorandum of t h e f a c t i s made on a card record and t h e payment i s e n t e r e d i n a r e c e i p t book kept by t h e borrower but the amount o f t h e payment i s n o t e n t e r e d or noted on t h e back o f t h e n o t e ; and t h a t t h e "bank c a r r i e s on i t s g e n e r a l l e d g e r among i t s a s s e t s the t o t a l amount of t h e s e i n s t a l l m e n t l o a n s and, i n order t o show t h e amount of payments r e c e i v e d , c a r r i e s among i t s l i a b i l i t i e s t h e amount of payments r e c e i v e d . S i n c e t h e s e i n s t a l l m e n t s appear t o be payments on t h e n o t e which, under t h e c o n t r a c t between the bank and t h e borrower, immed i a t e l y reduce t h e unpaid b a la nc e of the l o a n when r e c e i v e d by t h e bank, t h e y should not be r e p o r t e d as d e p o s i t s f o r r e s e r v e computat i o n p u r p o s e s . For your i n f o r m a t i o n , i n t h e c a s e o f a S t a t e member bank, we would t a k e t h e p o s i t i o n t h a t i n s t a l l m e n t payments of t h i s kind should not be reported in item 1 ( c ) of s c h e d u l e I of t h e cond i t i o n r e p o r t but that- t h e n e t amount of t h e l o a n s a f t e r d e d u c t i o n o f such payments should be r e p o r t e d i n the s t a t e m e n t o f a s s e t s and i n s c h e d u l e A of t h e c o n d i t i o n r e p o r t . Very t r u l y y o u r s , (Signed) L. P. Bethea L. P. B e t h e a , Assistant Secretary,
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