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157 BOARD OF GOVERNORS OF" THE FEDERAL RESERVE SYSTEM S-4..!;.7 WASHINGTON ADDRESS OF"F"ICIAL CORRESPONDENCE TO THE BOARD March 5 '· 1942 Dear Sir: This is with reference to the plan outlined in the Board's letter of February 4, R-957, for the Reserve System's taking over the collection of certain current consun1er credit statistics which heretofore have been compiled by the American Bankers Association. This le-t.ter is to complete plans and instructions for this project. The Board's letter requested each Reserve Bank to compile from registration statements a list of commercial banks which had sufficient total consumer instalment loans to rspresent one-half of such volume for its district. You were promised, and there is herewith enclosed, a copy of the American Bankers Association mailing list of reporting banks located in your district. From this list and from the list compiled rr.r you, you are to select the banks from which reports will be requested, subject to the following general suggestions: It is suggested that, in general, each Reserve Bank request reports from about the same nwnber of banks as is now on the American Bankers Association list. In any district in which this number does not provide an adequate sample to reflect local trends such additional reports as are necessary should be obtained. In general it would be desirable for the Reserve Banks to continue with the banks now on the Amurican Bankers Association mailing list; nevertheless, if tho total covGragc can be incroased substantially b,y substituting some banks with large amounts of instalment receivables not now reporting for some smaller ones that are now reporting, that should be done. ·rt is not necessary that the sample co-ver exactly one-half of total instalment receivables for all banks in the district. In districts including several large ·cities with a few banlw having relatively lar~e amounts of instal11ent receivables, a some'iii·hat larger proportion may be desirable < ~ •• :158 -2- S-/+47 and can probably be obtained by including only banks with instalment receivables of $1,000,000 or more. In districts where the business is scattered among a large number of banks a smaller proportion than 50 per cent·may be adequate. A bank which engages in only one kind of consumer credit business, such as purchasing mail order house paper or in making direct cons~~er loans, does not need to be excluded as "unrepresentative". In compiling the final list, reports should be requested only from member commercial banks. Industrial or Morris Plan banks, even though they may be national or State member banks, should not be included, as they are already covered by Department of Commerce reports. As indicated in the lette~ of February 4, the data to be requested are the volume of loans during the month and the amount outstanding at the end of the month for tl1e same i terns listed in the A-1 supplement to the December 1941 condition report. This form is almost identical with that previously used qy the American Bankers Association. A suggested form of the report is attached. The Board will furnish a supply of these forms to any Reserve Bank requesting them. The American Ea..11kers Association has collected January reports and the System will collect them for Februa.r.r and thereafter. Suggested drafts of letters to member banks are attacht=;d, which you may use if you wish. The initial requests should be dispatched as soon as possible. The returns may be tabulated by the Reserve Banks and shbmitted to the Board on a standard form, o. copy of which is attached. These tabulations should be addressed to the Division of Research and Statistics and, if possible, should reach the Board ~J ~arch 25. In following months it is hoped that this date of submission can be advanced to sometime between the lOth and the 15th of the month. This form requests figures on outstandings of the reporting banks as of December 31, 1941, which are to be compiled from the A-1 schedule attached to the December 1941 condition report. It will probably be necessary to revise this outstanding figure each month to include only those banks that submit reports that month. It should also be noted that the form calls for figures on volume of loans made in the month and current volume made in the preYious month (columns 4 and 5) by an identical group of banks, which may not correspond to the group reporting the figuce for volume of loans shown in column 3. These two sets of figures are to pr,wide comparisons with an unchanging base date, as well as from month to month, and will aid in making estimates of changes in total instalment loans for all banks. After some experience with this reporting system, it may be possible to 159 S--4/+'7 -3- include on~ identical reporting banks from month to month, but during the early stages allowance trrust be made for some variations. Further correspondence regarding details of this project may be addressed to the attention of Woodlief Thomas, Assistant Director of the Division of Research and Statistics. Ver<J truly yours, ~h/bUJ( Chester Morrill, Secretary. Enclosures (P.BA maHing list and forms for report sent with addressed copies only.) TO THE PRESIDE..~TS OF ALL FEDERI-1L RESERVE BA~'TKS S-447-a 160 ,_. Dear Mr. - - - - 1t is our understanding that you have been reporting consumer installnent credit volume and outstandi.Jlgs to the Consumer Credit Department of the American Bankers Association. In view of the Reserve System's responsibUity in cozmection rith the regulation of consumer credit, .it is desiral>le that we have a.s prompt and as accurate information as is possible with respect to CUl"rent developments in this field, and an arrangement has been made with the American. Bankers Association trr which ·the Board of Governors will take over the task of collecting the <nu'rent statistics from banks. Enclosed are report forms .for the month of. Fe brua.ry, w hie h' you are requested to f~ll out and return to this Federal Reserve • Bank. • . . Because we recognize the pressure to which banks are . subject at this time and do not wish to increase their burden, we are cont.inuing the report along the lines followed in the pi-ior American Bankers Association schedule, with minor amendments to correspond to the form used in the A-1 supplements which are submitted with the condition reports • Your reports will be treated. confidentiallg', of course, and you will be furnished with the releases based on the data collected, \ t The . Consumer Credit Department of the American Bankers Association, as it ~ alre~ have notified you, would like to continue to reoe'ive your individtlal report.s. If you will fill out· the forms in duplicate and authorize us, ~· signing the attached form, to transmit one of the copies to the Ameriean Bankers Association, we shall be glad to do so and thus avoid duplicate inquiries. -· Very \ ,. ·• '• tru~ yours, I • 161 S-44'7-b Dear Mr. For some time now the Consumer Credit Division of tha American Bankers Association has been collecting eurrent reports on the volume and outstandings of consumer instalment. :eredit. in. cOJnJDercial banks.. These reports have been collected from a comparative)¥ small group including in general the more important banks in. this :fiel.d. In view of the Reserve System's responsibility in connection with the regulation of 'consumer credit, it is desirable that we have as prompt and as accurate information as is possible with respect to current developments in this field and an arrangement has been made with the American Bankers Association by which the Board of Governors will take over the task of collecting the current statistics from banks. ln general figures will be collected from the same banks that have been reporting to the Americe.p. Bankers Association in the past, .but in order to improve the value of this series, a few other member banks are being raquested to report. • • • Our records indicate that your bank holds a substantial volume of consumer instalment loans, and according)¥ current reports from you would add appreciabl3' to our coverage. Copies of the report forms for the month of February are enclosed. Because we recognize the pressure to which banks are subject at this time and do not wish to increase their · burden, we are continuing the report along the lines followed in the prior American Bankers Association schedule, with minor amendments to correspond to the A~l supplements which are submitted with the condition reports. The Consumer Credit Division of the American Bankers Association is interested in receiving the individual bank reports and is requesting the banks which former]¥ reported to it to authorize the Reserve Banks to transmit duplicate copies of the reports to that division. The Association would also like to have copies of the .reports of such banks as are added to the current reporting group. If you are willing to have your individual-report passed along to the American Bankers Association please fill out and return to us the attached form of authorization. If this is done please send us two copies of the report each month. These arrangements are being made so as to avoid duplicate inquiries to individual banks. • Your reports will ~ treated confidentially, of course, and you will be furnished with the releases based on tho data enclosed • Very • • t~ yours, 162 .... S-447-c • This is to authorize the Federal .Reserve Bank of _ _ _ _ _.,_ to forward a coP! of each monthly re- • port of consumer instalment oredi.t of the_.__ _ _ __ Bank, as received, to the ConSULler Cr~dit Division of the American Bankers Association •. • Officer ,.. NOTICE: This authorizatiol'l ms;v be rescinded at axzytime qy Bank of .. • giving notice to the Federal Reserve ------
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