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214 BOARD OF G O V E R N O R S OF THE FEDERAL RESERVE SYSTEM .1-931 WASHINGTON A D D R E S S OFFICIAL C O R R E S P O N D E N C E TO THE BOARD December 13, 1941 Dear Sir: Enclosed are 25 copies of a specimen form of the STATEMENT OF NECESSITY TO PREVENT UNDUE HARDSHIP which the Board has prescribed for use pursuant to the provisions of section 3(d) of Regulation W. This specimen form has been designated as Form F.11. $6$. The forms for actual use ty Registrants will not be printed by the Board or by the Reserve Banks, but specimen forms are to be distributed ty the Federal Reserve Banks to the instalment selling and lending trade so that Registrants may secure a supply either ty printing or otherwise reproducing them or ty obtaining them from stationery or supply houses. The notice at the top of the form indicates the restrictions on reproduction. It is suggested, that your Bank print a supply of the specimen form in such number as will permit a distribution of one copy to each Registrant in your District. Such additional specimen copies as you deem necessary may be distributed to Registrants and others for sample purposes. The Board requests that the Reserve Banks, in preparing sample copies, adhere strictly to the size of the sheet and the. style of type used for the specimen copy. Section 8(d) of Regulation W reads in part as follows: "Until the Board has prescribed the form and content of the Statement of Necessity the Registrant may in good faith accept a written statement in any form, provided such statement otherwise conforms to the requirements of this section." The Board has set January 15, 194-2 as the date on and after which the use of a form in accordance with Form F.R. 565 will be required, Until that date, a Registrant may accept a statement in any form meeting the other requirements of section 8(d). 215 -2- " R-931 The enclosed form of notice to Registrants to accompany the specimen forms is designed to serve only as a suggestion to Reserve Banks and, of course, you are at liberty to coir.nose your own appropriate form of notice or to modify or alter the suggested form in any particular. Use by Registrants of this form of Statement of Necessity will demonstrate whether the form accomplishes its obvious objective. The Reserve Banks are invited to comment from time to time on reactions from the trade and the public. The Board and its staff gratefully acknowledge the helpful suggestions of the Reserve Banks. . Very truly yours, %-ke-j tu, hi Chester Morrill, Secretary. Enclosures TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS 216 P.—93-i—a FEDERAL RESERVE BANK OF NOTICE REGARDING USE OF "STATEMENT OF NECESSITY TO PREVENT UNDUE HARDSHIP" IN CONNECTION WITH REGULATION W Regulation W, relating to consumer credit, which was issued by the Board of Governors of the Federal Reserve System pursuant to Executive Order No. 8843 issued by the President of the United States, limits... the terms of payment of certain instalment credits. It would tend to defeat the purposes of the Order if, after an instalment credit subject to Regulation ¥ had been granted, the terms could ordinarily be changed at e later time or the credit refinanced to . provide a rate of payment not regularly permitted by trie regulation. However, in order to prevent undue hardship, provision has been made for flexibility in exceptional circumstances. The regulation provides that in such circumstances a creditor may, within certain limits, renew, revise, consolidate, or refinance an instalment credit already outstanding so as to provide a rate of payment below that regularly permitted by the regulation. Section 3(d) of the regulation provides that a creditor may take such action upon acceptance in good faith of a "Statement of Necessity to Prevent Undue Hardship" signed by the obligor, Until January 15, 1942, such a statement may be in any form which meets the requirements set forth in section 8(d) of the regulation, but a statement received on or after January 15, in order to be acceptable under the regulation, must follow the form, prescribed by the Board of Governors of the Federal Reserve System. A specimen copy of the form which the Board has prescribed for use in this connection is enclosed. The forms will not be supplied by the Board or by this Bank but should be printed or otherwise reproduced by the Registrant or obtained by him from stationery or supply houses. Please note that the form should bo reproduced only in accordance with the instructions at the top of the specimen form. Your attention is also called to the fact that Registrants are instructed to keep all statements on file. Any inquiry relating to this form should be addressed to the Federal Reserve Bank of or to its Branch(es).
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