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236 TELGGRA.:.\1 May 26, 191..;.2 (Addressed to the Presidents of all Federal Reserve Banks) Several questions regarding WH-1 and related matters art: r_tiscussed below. • • • .. As explained in WR-1, a single-payment loan made before May;..§. may be renewed more than once. Furthermore, the borrmver raay pay a portion of the loan at the time of any such renewal, or the loan may be put on an instalment basis without regard to the rerluirements of section 6(b) or any oth~-;r provision of the R.el:;u1ation. It is to be noted, however, that the absence .from He.gulation -~.J of restrictive provisions with respect to sueh renewals or cGnversions is not intended to encourBge them, out must be considered. in the light of the joint statement made for the pre.ss m !<.1ay 7 by the Comptroller of the Currency, the Board of Directors cf t,he Fed~ eral Deposit Insurance Corporation, m;d the Board of Governors of the Federal Heserve System. This joint statement will be published in the Federal Reserve Bulletin for ,Tune. A loan of over $1,500 is nc•t subJect to the Regulation whether the loan is single-payment or instalment, whether made before or after Ma.v 6, or wh<~ther all or part is to b~; used to pey off a previous indebted:1ess with the ~~ame lender or another lender. On the other h<md, if the obligor on a ;n,ooo note borr·ows another ~~800 from the same lender as a sepaJ:-a.te transaction evidenced by a separate note, the new $800 loan is subject to the HegulaU.on, If instead of renewing or revis:Lng a :3incJ.e-payment loan made prior to May 6, the obligor makes one Joart (of ~n, 500 or less) part of >'rhich is to be used to pay off f,be old sin~le-pnymer1t loan and part of which represents new money, only the part of the new loan r,:;presenting new money is subject to the requir<O!;tlEmts of the Hegulation. However, in any such case it 1'tould ''rdinarily be bett.er practice for the lending institution to k:::ep !.,he credi;,s sepa.rate and not tc) eombine them in a single ob1igaticn since otherwise it might be difficult for the lending institution and for the examiners to be sure that there was no violation of the Hegulation. A renee;-al or revision of a loan Y•hic~l 71ClS origirtally :aore than $1,500 is not subject f:,:) the Regulation ENen thou,~·h the balance at the time of the renewal or revision is 'icss than *,,_l, :)'J'J o . (Signed) C!:1ester Morrill
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