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FE D E R A L R E S E R V E BANK O F N E W Y O R K l° “ june 7Ni'9469?] Fiscal Agent of the United States Public Notice of Offering oi $1,300,000,000, or thereabouts, o f 91-Day Treasury Bills Dated June 13, 1946 Maturing September 12, 1946 To all Incorporated Banks and Trust Companies in the Second Federal Reserve District and Others Concerned: Following is the text of a notice today made public by the Treasury Department with respect to a new offering of Treas ury bills payable at maturity without interest to be sold on a discount basis under competitive and fixed-price bidding. FOR RELEASE, M ORNING N E W SPAPERS, Friday, June 7, 1946. TREASU RY D EPARTM ENT Washington The Secretary of the Treasury, by this public notice, invites tenders for $1,300,000,000, or thereabouts, of 91-day Treasury bills, to be issued on a discount basis under competitive and fixed-price bidding as hereinafter provided. The bills of this series will be dated June 13, 1946, and will mature September 12, 1946, when the face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $1,000, $5,000, $10,000, $i00,000, $500,000, and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, two o’clock p.m., Eastern Standard time, Monday, June 10, 1946. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and the price offered must be expressed on the basis of 100, with not more than three decimals, e. g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Secretary of the Treasury of the amount and price range of accepted bids. Those submitting tenders will be advised of the acceptance or rejection thereof. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations, tenders for $200,000 or less from any one bidder at 99.905 entered on a fixed-price basis will be accepted in full. Payment of accepted tenders at the prices offered must be made or completed at the Federal Reserve Bank in cash or other immediately available funds on June 13, 1946. The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, shall not have any exemption, as such, and loss from the sale or other disposition of Treasury bills shall not have any special treatment, as such, under Federal tax Acts now or hereafter enacted. The bills shall be subject to estate, inheritance, gift, or other excise taxes, whether Federal or State, but shall be exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes of taxation the amount of discount at which Treasury bills are originally sold by the United States shall be considered to be interest. Under Sections 42 and 117 (a) (1) of the Internal Revenue Code, as amended by Section 115 of the Revenue Act of 1941, the amount of discount at which bills issued hereunder are sold shall not be considered to accrue until such bills shall be sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder need include in his income tax return only the difference between the price paid for such bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury Department Circular No. 418, as amended, and this notice, prescribe the terms o f the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. In accordance with the above announcement tenders will be received at the Securities Department of this bank (9th floor, 33 Liberty Street) New York 7, N. Y., or at the Buffalo Branch of this bank (270 Main Street) Buffalo 5, N. Y., up to two o ’clock p.m., Eastern Standard time (three o’clock p.m., “ Daylight Saving time” ), on Monday, June 10, 1946. It is requested that tenders be submitted on special form printed on reverse side and returned in special envelope enclosed herewith. Payment for the Treasury bills cannot be made by credit through the War Loan Deposit Account. Payment must be made in cash or other immediately available funds. A llan S proul, President. (Extract from Treasury Department statement released for publication June 4, 1946, announcing results after tenders were opened for Treasury bills dated June 6, 1946 maturing September 5, 1946) Total applied for .....$1,922,386,000 Total accepted .......... $1,312,537,000 (includes $35,317,000 entered on a fixed-price basis at 99.905 and accepted in full) Average price ....... 99.905+ Equivalent rate of discount approx. 0.375% per annum Range of accepted competitive bids (excepting one tender of $500,000) : High ...................... 99.908 Equivalent rate of discount approx. 0.364% per annum Low ........................ 99.905 Equivalent rate of discount approx. 0.376% per annum (66 percent of the amount bid for at the low price was accepted) Federal Reserve District Boston ............................. New York ........................ Philadelphia Cleveland ........ Richmond ...... Atlanta ........... Chicago ......... St. Louis ........ Minneapolis ... Kansas City ... Dallas ............. San Francisco T ota l ........ Total Applied for $ 20,638,000 1,456,502,000 34.070.000 19.790.000 18.475.000 1.795.000 269.209,000 7.590.000 11.910.000 18.342.000 13.375.000 50.690.000 $1,922,386,000 Total Accepted » 13,804,000 977,774,000 23.870.000 18.090.000 15.755.000 1.545.000 181,824,000 5.720.000 8.510.000 15.656.000 12.899.000 37.090.000 $1,312,537,000 ( over) 15K IM PORTANT— If it is desired to bid on a competitive basis, fill in rate per 100 and maturity value in paragraph headed "Competitive Bid” . If it is desired to bid on a fixedprice basis, fill in only the maturity value in paragraph headed "Fixed-Price Bid” . DO NOT fill in both paragraphs on one form. A separate tender must be used for each bid. No. TENDER FOR 91-DAY TREASURY BILLS Dated June 13, 1946. Maturing September 12, 1946. Dated at __ .1946 To F e d e r a l R e serv e B a n k o f N ew Y o r k , Fiscal Agent of the United States. COMPETITIVE BID FIXED-PRICE BID Pursuant to the provisions of Treasury Department Circular No. 418, as amended, and to the provisions of the public notice on June 7, 1946, as issued by the Secretary of the Treasury, the undersigned offers to pay Pursuant to the provisions of Treasury Department Circular No. 418, as amended, and to the provisions ¡of the public notice on June 7, 1946, as issued by the Secretary of the Treas ury, the undersigned offers to pay a fixed-price of 99.905 (rate per 100) for a total amount of _________________________* for a total amount of (Rate per 100) $_________ ___ _____ __________ (maturity value) of the Treasury bills therein described, or for any less amount that may be awarded, payment therefor to be made at your bank in cash or other immediately available funds on the date stated in the public notice. $-------------------------------------------- (maturity value) (Not to exceed $200,000) of the Treasury bills therein described, payment therefor to be made at your bank in cash or other immediately available funds on the date stated in the public notice. The Treasury bills for which tender is hereby made are to be dated June 13, 1946, and are to mature on September 12, 1946. This tender will be inserted in special envelope entitled “ Tender for Treasury bills.” Name of Bidder.................................................................................................... . (Please print) By ..................................................................... , (Official signature required) ...................... (Title) Street Address .................................................................................................... (City, Town or Village, P.O. No., and State) If this tender is submitted for the account of a customer, indicate the customer’s name on line below: (Name of Customer) (City, Town or Village, P.O. No., and State) Use a separate tender for each customer’s bid. IM PORTAN T INSTRUCTIONS: 1. N o tender for less than $1,000 will be considered, and each tender must be for an even multiple of $1,000 (maturity value). A separate tender must be executed for each bid. 2. If the person making the tender is a corporation, the tender should be signed by an officer of the cor poration authorized to make the tender, and the signing of the tender by an officer of the corporation will be construed as a representation by him that he has been so authorized. If the tender is made by a partnership, it should be signed by a member of the firm, who should sign in the form “ .......................................................................................... a copartnership, by .............................................................................................................. a member of the firm.” 3. Tenders will be received without deposit from incorporated banks and trust companies and from respon sible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 per cent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. 4. If the language of this tender is changed in any respect, which, in the opinion of the Secretary of the Treasury, is material, the tender may be disregarded. Payment by credit through War Loan Deposit Account will not be permitted. T E N T B -8 3 2 -a * Price must be expressed on the basis of 100, with not more than three decimal places. Fractions may not be used. ( o ver ) B O A R D OF G O V E R N O R S of the F E D E R A L R E SE R V E SY STE M CONSUMER CREDIT • -yr R E G U L A T IO N W A s A m ended E ffe ctiv e D ecem b er 1, 1945 IN Q U IR IE S R E G A R D IN G T H IS R E G U L A T IO N Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank or Federal Reserve branch bank o f the district in which the inquiry arises. FOREWORD (Not a part of the regulation) T h is rep rin t o f the regu lation in corp ora tes all a m en dm en ts to and inclu din g A m en d m en t N o. 19, effectiv e D ecem ber 1, 1945. Regulation W , issued under authority of the President’s Executive Order o f August 9, 1941, was revised, effective M ay 6 , 1942, in compliance with that part of the President’s Special Message to C on gress on April 27, 1942, which reads: “ T o keep the cost of living from spiraling upward we must discourage credit and instalment buying, and encourage the p ay ing off of debts, mortgages, and other obligations, for this pro motes savings, retards excessive buying and adds to the amount available to the creditors for the purchase of war bonds.” As revised, Regulation W applies to a comprehensive list o f durable and semi-durable goods for civilian consumption. The Regulation extends to all types of consumer credit whether in the form o f instal ment sales and instalment loans or in the form of charge accounts and single-payment loans. Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank or the Federal Reserve branch bank of the district in which the inquiry arises. REGULATION W CONSUMER CREDIT CON TENTS S ec. Sec . S ec . S ec . S ec. S ec. S ec. S ec. Page 1. Scope of R egulation ................................................................................... 2. D efinitions ..................................................................................................... (a) Person............................................................................................... (b) Extension of credit......................................................................... (c) Instalment credit............................................................................ (d) Sale.................................................................................................... (e) Instalment sale................................................................................ (jf) Charge sale....................................................................................... (g) Charge account............................................................................... (h) Instalment loan ............................................................................... (i) Single-payment loan...................................................................... (j) Cash price......................................................................................... (k) Registrant......................................................................................... 3. G eneral R equirements and R egistration .......................................... (a) General requirements..................................................................... (b) General license................................................................................ (c) Registration..................................................................................... (d) Suspension of license...................................................................... 4. I nstalment Sal e s .......................................................................................... (а) Down paym ent............................................................................... (б) Maximum maturity........................................................................ (c) Amounts and intervals of instalments....................................... (d) Statement of transaction.............................................................. (?) “ Approvals,” “ Demonstrators,” etc........................................... 5. C harge A ccounts .......................................................................................... (a) Maximum maturity........................................................................ (b) Restriction....................................................................................... (c) D efault.............................................................................................. (d) Curing defaults................................................................................ (c) Conversion of charge account into instalment credit prior to default...................................................................................... (J) “ Authorization” of small items................................................... (g) Small defaults.................................................................................. (ih) “ Approvals,” “ Demonstrators,” etc........................................... 6. I nstalment L oans ......................................................................................... (а) Instalment loans to purchase listed articles............................. (б) Instalment loans not to purchase listed articles....................... (c) Additional requirements................................................................ (d) Statement of the borrower............................................................ 7. S ingle-P ayment L oans ................................................................................ (a) Single-payment loans to purchase listed articles..................... (b) Single-payment loans not to purchase listed articles.............. (c) Renewals and extensions............................................................... (d) Statement of the borrower............................................................ (e) Loans payable on demand............................................................ ( /) Credit to retire obligations held elsewhere................................ 8. E xceptions ...................................................................................................... (а ) Real estate and home im provem ent lo a n s ......................... (б) Security loans and cred its............................................................ (c) Educational, hospital, medical, dental, and funeral expenses.. (d ) M ilitary a ircra ft c r e d its .......................................................... (e) Credit to dealers............................................................................. (J) Fire and casualty insurance premiums...................................... (g) Disaster credits.......... .................................................................... (h) Agricultural loans........................................................................... 5 5 5 5 6 6 6 6 6 6 6 6 6 7 7 7 8 8 8 8 9 9 9 9 10 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 14 14 14 15 15 15 15 15 15 16 16 16 16 16 CONTENTS S ec . 9. S ec . 10. S ec . 11. S ec . 12. S ec . 13. S ec . 14. Page (i) Business loans................................................................................. 17 Q) Insurance policy loans............................... .......................... . . . . 17 (k) Credit to Governmental agencies and religious, educational or charitable institutions.......................................................... 17 (I) Railroad watches............................................................................ 17 (m) Commodity Credit Corporation.................................................. 17 17 (n) Loans to Indians............................................................................ (0) Servicemen’s guaranteed loans.................................................... 17 (p ) D e m o n stra to rs............................................................................. 18 Seasonal A djustments................................................................................. 18 (a) Intervals of payments.................................................................... 18 (b) Farmers and stock raisers............................................................. 18 (c) Other persons with seasonal incomes......................................... 18 R enewals , R evisions , and A dditions of I nstalment C red it ......... 19 (a) Renewals or revisions..................................................................... 19 (b) Additions to outstanding credit held by Registrant............... 19 (c) Credit to retire instalment obligations held elsewhere........... 20 20 (d) Statement of necessity to prevent undue hardship................. E vasive D evices P roh ibited ..................................................................... 21 (a) Evasive side agreements..................................................... , . . . . 21 (b) Loans to make down payments................................................... 21 (c) Side loan to make down payment on listed article................. 21 (d) Purchase of article in lieu of trade-in......................................... 21 Ie) Coupon plans................................................................................... 21 M iscellaneous P rovisions ......................................................................... 21 (a) Clerical errors.................................................................................. 21 (b) Extension of credit for mixed purposes..................................... 22 (c) Calculating maximum maturity of instalment contract......... 22 (</) “ Lay-away” plans........................................................................... 22 (e) Contracts and obligations outstanding on September 1, 1941. 22 (f ) Transactions subjected to regulation by amendment............. 22 23 (g) Payments arising out of loans on pledged obligations............ (h) Preservation of records.................................................................. 23 (1) Inspections and production of records....................................... 23 (j ) Transactions outside United States............................................ 23 Ik) Right of Registrant to impose stricter requirements.............. 23 (I) Sets and groups of articles............................................................ 24 . (m) “ Cycle billing” ................................................................................ 24 (n) Mail orders....................................................................................... 24 L isted A rticles , D own P ayments and M aximum C redit V alues . . 25 (a) Listed articles.................................................................................. 25 Group A ......................................................................................... 25 Group B ......................................................................................... 25 26 Group C ......................................................................................... Group D ......................................................................................... 26 (b) Trade-in............................................................................................ 26 (c) Down payment on automobiles and motorcycles.................... 26 (d) Down payment where price is fixed by Federal authorities.. 26 (e) Maximum amount of loan............................................................ 26 E nforceability of C ontracts .................................................................. 26 R E G U L A T IO N W A s am ended e ffe c tiv e D ecem b er 1, 1945 CONSUMER CREDIT SECTION 1. SCOPE OF REGULATION This regulation is issued by the Board of Governors o f the Federal Reserve System (hereinafter called the “ B oard” ) under authority of section 5 (b ) o f the A ct of October 6, 1917, as amended, and Executive Order No. 8843, dated August 9, 1941 (hereinafter called the “ Execu tive Order” ). The regulation applies, in general, to any person who is engaged in the business o f making extensions o f instalment credit, extending credit in charge accounts, making single-payment loans in amounts o f $1,500 or less, or discounting or purchasing obligations arising out o f such extensions o f credit. It applies whether the person so engaged is acting as principal, agent, broker or otherwise, and whether the person is a bank, loan com pany, or finance com pany, or a person who is so en gaged in connection with any other business, such as by making such extensions o f credit as a dealer, retailer, or other person in connection with the selling of consumers’ durable or semi-durable goods.1 s e c t io n 2. d e f in it io n s For the purposes o f this regulation, unless the context otherwise requires: (a) “ Person” means an individual, partnership, association, or cor poration. (b) “ Extension of Credit” means any loan or mortgage; any instal ment purchase contract, any conditional sales contract, or any sale or contract o f sale under which part or all o f the price is payable sub sequent to the making o f such sale or contract; any rental-purchase contract, or any contract for the bailment or leasing of property under which the bailee or lessee either has the option of becoming the owner thereof or obligates himself to pay as compensation a sum substantially equal to or in excess o f the value thereof; any contract creating any lien or similar claim on property to be discharged by the payment of money or its equivalent; any purchase, discount, or other acquisition of, or any extension o f credit upon the security of, any obligation 1 T h e E x ecu tive O rder defines “ consum ers’ du rab le R o o d ” r.s including “ any g o o d , er used, w hich is durable o r sem i-d u ra b le and is used o r usable fo r personal, fa m ily purposes, and any service connected w ith th e acquisition o f any such g o o d o r o f th erein ." S ection 13(a) lists the consum ers’ d urable and se m i-d u ra b le g o o d s w ith in the regulation. w hether new o r household any interest th e sco p e o f 5 6 REGULATION W arising out of any of the foregoing; and any transaction or series of transactions having a similar purpose or effect. (c) “ Instalment Credit” means an extension o f credit which the obligor undertakes to repay in two or more scheduled payments or as to which the obligor undertakes to make two or more scheduled p ay ments or deposits usable to liquidate the credit, or which has a similar purpose or effect. ( d ) “ Sale” means a transfer of property for a price in money or its equivalent which the buyer pays or promises to pay to the seller for the thing bought or sold. It includes a lease, bailment, or other transaction which is similar in purpose or effect to a sale. ( e ) “ Instalment Sale” means an instalment credit which is made, as principal, agent or broker, by any seller o f any consumers’ durable or semi-durable good listed in section 13(a) (hereinafter called a “ listed article” ) and which arises out o f a sale of such listed article. (/) “ Charge Sale” means an extension o f credit (other than instal ment credit) which is made, as principal, agent or broker, by any seller and which arises out of a sale of any article, whether listed or unlisted. (<7) “ Charge Account” means the indebtedness arising from charge sales between the same seller and purchaser. (h ) “ Instalment Loan” means an instalment credit, other than an instalment sale, in the form of a loan which is in a principal amount of $1,500 or less; but the definition does not include any loan upon the security of any obligation which arises out of any instalment sale or instalment loan. (?) “Single-pavment Loan” means an extension of credit in the form o f a loan to one or more individuals (other than a partnership), which is repayable in a single payment whether on demand or on a fixed or determinable future date, and which is in a principal amount o f $1,500 or less; but the definition does not include ( 1) a loan made for business purposes to a business enterprise which is not for the purpose of pur chasing a listed article, (2 ) a loan for agricultural purposes to a per son engaged in agriculture which is not for the purpose o f purchasing a listed article or (3) any loan upon the security of any obligation which arises out of any instalment sale, instalment loan, charge account or single-pavment loan. (;') “ Cash Price” means the bona fide cash purchase price of an article, including the bona fide cash purchase price of any accessories, any bona fide delivery, installation and service charges (other than interest, finance or insurance charges), and any applicable sales taxes. ( k ) “ Registrant” means a person who is licensed pursuant to sec tion 3. 7 REGULATION W S E C T IO N 3. GENERAL R E Q U IR E M E N T S AND R E G IS T R A T IO N (a) General Requirements.— N o person engaged in the business of making instalment sales,2 charge sales of listed articles, instalment loans, or single-payment loans, or engaged in the business o f lending on the security o f or discounting or purchasing obligations arising out of such extensions o f credit, shall make or receive any payment which constitutes or arises directly or indirectly out of any such extension of credit made by him or out o f any such obligation lent on or dis counted or purchased by him, except on the following conditions: (1 ) He must be licensed pursuant to this section; (2 ) Ho must not make or receive any such payment in connec tion with an extension of credit made by him if he knew or had reason to know when he made such extension of credit any fact by reason of which it failed to com ply with any requirement o f this regulation applicable thereto; (3) He must not make or receive any such payment in con nection with any obligation which he has purchased or discounted or has accepted as collateral if, at the time he purchased or dis counted such obligation or accepted it as collateral, it showed on its face a failure to com ply with such requirements or if he knew any fact by reason of which the extension of credit giving rise to the obligation failed to com ply with such requirements; and (4) He must not make or receive any such payment in connec tion with an obligation arising out of an extension of credit which he has renewed, revised or consolidated, if he knew or had reason to know when he renewed, revised or consolidated it any fact by reason of which such renewal, revision or consolidation re sulted in a failure to com ply with such requirements. ( b ) General License.— Whenever this regulation is amended so that any person who was not formerly subject to section 3 (a) becomes subject thereto, such person is hereby granted a general license; but such general license shall terminate at the end of the second full cal endar month after the month in which the amendment becomes effec tive unless such person has registered in the manner provided in section 3 (r ) before such termination, except that the general license o f a per son who is required to be licensed solely because he makes charge sales of listed articles or makes single-pavment loans shall not termi nate until the expiration o f the time within which the Board shall, by public announcement, require such person to register. Any person whose license is not suspended m ay become licensed by registering in the manner provided in section 3 (c ). - It is t o he noted tliat the term "in sta lm en t sale” 'in clu d e s o n ly instalm ent credit arising out o f Jlie sale o f listed articles. 8 REGULATION W (c) Registration.— Registration may be accomplished by filing, with the Federal Reserve Bank or any branch thereof in the district in which the main office of the Registrant is located, a registration state ment on forms obtainable from any Federal Reserve Bank or branch. ( d ) Suspension o f License.3— The license of any Registrant m ay, after reasonable notice and opportunity for hearing, be suspended by the Board, in its entirety or as to particular activities or particular offices or for specified periods, on any of the following grounds: (1) Any material misstatement or omission willfully or negli gently made in the registration statement ; (2) Any willful or negligent failure to com ply with any pro vision of this regulation or any requirement of the Board pursuant thereto. A license which is suspended for a specified period will again become effective upon the expiration of such period. A license which is sus pended indefinitely may be restored by the Board, in its discretion, if the Board is satisfied that its restoration would not lead to further violations of this regulation and would not be otherwise incompatible with the public interest. SECTION 4. INSTALMENT SALES Except as otherwise permitted by this regulation, each instalment sale shall com ply with the following requirements: (a) Down Payment.— The down payment shall not be less than one-third of the cash price of the listed article, except that: (1) In the case of pianos and furniture as defined in Group B of section 1 3 (a ), the down payment need not be more than onefifth of the cash price; (2) In the case of articles listed in Group C of section 1 3 (a ), no down payment is required; and (3) In the case of articles the cash price of which is $10.00 or less, no down payment is required. In any case involving a used automobile, any article for which the Federal price authorities have prescribed a maximum retail price, or any article on which there is a trade-in by the purchaser, the amount of the down payment must be computed in accordance with the ap plicable provisions of section 13. In ad d ition , any R eg istrant w h o w illfu lly v iola tes or kn ow in gly participates in a v iola tion o f this regulation is su b je ct t o the penalties prescribed in section 5 ( b ) o f th e A c t o f O ctob er 6. 1917. as am ended, w hich reads in part as f o llo w s : “ W h oev er w illfu lly v iola tes any o f th e provisions o f th is su bdivision or o f any license, order, rule or regulation issued thereunder, shall, upon co n viction , b e fined n ot m ore than $10,000, or, if a natural person, m a y b e im prisoned fo r not m ore than ten years, or b o th : and any officer, director, or agent o f any co rp o ra tio n w h o know ingly p a r t ic ip â t « in such v iola tion m ay b e punished b y a like fine, im prisonm ent, or b o t h .” REGULATION W 9 (6) Maximum M aturity.— The maturity shall not exceed the maxi mum maturity specified for the listed article in section 13(a). (c) Amounts and Intervals o f Instalments.— Except as permitted by section 9, the instalments in which the time balance is payable (1) shall not be less than $5.00 per month or $1.25 per week on the aggregate instalment indebtedness of one debtor to the same creditor; (2 ) shall be substantially equal in amount or so arranged that no in stalment is substantially greater in amount than any preceding instal ment; and (3) shall be payable at approximately equal intervals not exceeding one month. ( d ) Statement of Transaction.— Unless the cash price of the article sold is $6.00 or less, the instalment sale shall be evidenced by a written instrument or record, and there shall be incorporated therein or at tached thereto a written statement, of which a copy shall be given to the obligor as promptly as circumstances will permit, and which shall set forth (in any order) the following inform ation: (1) A brief description identifying the article purchased; (2) The cash price of the article; (3) The amount of the purchaser’s down payment (i) in cash and (ii) in goods accepted in trade, together with a brief descrip tion identifying such goods and stating the monetary value as signed thereto in good faith; (4) The deferred balance, which is the difference between items (2) and (3 ); (5) The amount of any insurance premium for which credit is extended and o f any finance charges or interest by way o f dis count included in the principal amount of the obligation, or the sum o f these amounts; (6 ) The time balance owed by the purchaser, which is the sum total o f items (4) and ( 5 ) ; and (7) The terms of payment. The Statement of Transaction need not include a description of the article if it is purchased by means of a coupon book or similar medium o f instalment credit upon which a cash down payment of at least one-third of its purchase value has been made. ( e ) “ A pprovals,” “ Demonstrators,” etc.— In case a listed article is delivered in anticipation of an instalment sale of that article or a similar article (such as a delivery “ on approval,” “ on trial,” or as a “ demonstrator” ), the Registrant shall require, at or before the time of such delivery, a deposit equal to the down payment that would be required on such an instalment sale. 10 REGULATION W SECTION 5. CHARGE ACCOUNTS Except as otherwise permitted by this regulation, each charge sale and charge account shall com ply with the following requirements: (а) Maximum Maturity.— Except as permitted by section 9, no listed article shall be sold in a charge account with an agreement that payment therefor m ay be deferred beyond the 10th day o f the second calendar month following the calendar month during which such article was sold. (б ) Restriction.— When a charge account is in default, the Regis trant shall not extend credit to the obligor for any charge sale or instalment sale of any listed article until the default has been cured by one of the methods described below. (c) Default.— A charge account shall be deemed to be in default if any article (whether listed or unlisted) for which credit was extended in such account has not been paid for in full on or before the 10th day o f the second calendar month following the calendar month during which such article was sold, except that: (1) A charge account shall not be deemed to be in default be cause of a failure to make payment for any article purchased therein prior to M ay 1, 1942, unless such article shall not have been paid for in full by July 10, 1942; (2) If an article was sold in a charge account prior to M a y 1, 1942, under a definite agreement between the seller and purchaser (evidenced in writing) that such article need not be paid for until a specified date, the account shall not be deemed to be in default with respect to such article unless such article shall not have been paid for in full by the date so agreed upon; and (3) For persons with seasonal incomes, adjustments are per mitted in accordance with section 9. ( d ) Curing Defaults.— When a charge account is in default, the default may be cured either: (1) B y payment in full of the amount in default; (2 ) B y the purchaser entering into a written agreement in good faith to pay the amount in default within a period of 6 months or less from the date of such agreement by substantially equal instalment payments of not less than $5.00 per month or $1.25 per week at substantially equal intervals not exceeding one REGULATION W 11 m on th ;1 or (3) B y the purchaser filing with the creditor a Statement of Necessity in accordance with section 10 (d) and entering into a written agreement in good faith to pay the amount in default within a period of 12 months from the date of such agreement by substantially equal instalment payments at substantially equal intervals not exceeding one month.4 In the case of any charge account obligation of any member or former member of the armed forces of the United States incurred prior to his induction into such service, a default may be cured by the purchaser entering into a written agreement in good faith to make payment according to such terms as the Registrant shall deem it appropriate to require. (e) Conversion o f Charge A ccount into Instalment Credit Prior to Default.— If the seller and purchaser agree to convert into an instal ment credit4 the whole or any part of a charge account arising from the sale of a listed article the charge for which is not in default, the agree ment shall be in writing and shall provide that the instalment credit shall bo retired within 6 months from the date of the agreement by substan tially equal payments of not less than $5.00 per month or $1.25 per week, at substantially equal intervals not exceeding one month. (/) “ A uthorization” o f Small Items.— In case a Registrant makes a charge sale of a listed article the cash price of which, is $10.00 or less,, he shall not be deemed to have violated section 5 (6 ) if the person authorizing such sale on behalf of the Registrant acts in good faith without knowledge that the customer’s charge account is in default, provided the Registrant, prom ptly upon discovery that such charge account is in default and in any event within 30 days from the date of sale, makes a request of the customer that lie either return the article or else pay for it in full immediately. (g) Small Defaults.— A charge account shall not be deemed to be “ in default” within the meaning of sections 5 (c ) or 12 (m ) if the amount in default is less than $10.00. ( h ) “ A pprovals,” “ Demonstrators,” etc.— When a charge account is in default, the Registrant shall not deliver any listed article to the obligor in anticipation of a sale of that article or a similar article (such as a delivery “ on approval,” “ on trial,” or as a “ dem onstrator” ). When a charge account is not in default and the Registrant makes such a delivery of any article, the delivery (unless it is in anticipation of an instalment sale) shall be treated for the purposes of this regula tion as a charge sale made on the date of the delivery. 1 Ren ew als, revisions, and ad d ition s o f instalm ent credits prow inp out o f rliarve accou n ts are su bject t o th e p rovisions o f section 10. 12 REGULATION W SECTION 6. INSTALMENT LOANS Except as otherwise permitted by this regulation, each instalment loan shall com ply with the following requirements: (а) Instalment Loans to Purchase Listed Articles.— I f trant knows or has reason to know that the proceeds o f an loan (defined to exclude loans of more than $1,500) are to purchase any listed article having a cash price o f $15.00 or the Regis instalment be used to more: (1) The principal amount lent (excluding any interest or finance charges and the cost of any insurance) shall not exceed tw othirds of the cash price of the listed article except that: (i) listed (ii) fifths This requirement does in Group C of section The principal amount of the cash price of a Group B of section 1 3 (a ). not apply in the case of articles 1 3 (a ); and lent may be not more than fourpiano or furniture as defined in In any case involving a used automobile, or any article on which there is a trade-in by the purchaser, the maximum amount which may be lent shall be computed in accordance with the applicable provisions o f section 13; and (2) The maturity shall not exceed the maximum maturity speci fied for the listed article in section 13(a). ( б ) Instalment Loans Not to Purchase Listed Articles.— In the case of an instalment loan (defined to exclude loans of more than $1,500) which is not subject to section 6 (a ), the maximum maturity shall not exceed 18 months; except that, if the Registrant knows or has reason to know that the proceeds are to be used to reduce or retire a charge account arising in whole or in part from the sale of a listed article, or to reduce or retire a single-payment loan which is subject to this regu lation, the maximum maturity shall not exceed 6 months. (r) A dditional Requirements.— Whether subject to section 6 (a) or section 6 (6 ), the instalment loan shall com ply with the following additional requirements: ( 1) It shall be evidenced by a written instrument or record, and there shall be incorporated therein or attached thereto a writ ten statement, of which a copy shall be given to the obligor as prom ptly as circumstances will permit, and which shall set forth the terms o f paym ent; (2) Except as permitted by section 9, the obligation shall be payable in instalments which (i) shall not be less than $5.00 per month or $1.25 per week, on the aggregate instalment indebtedness REGULATION W 13 of the debtor to the creditor, (ii) shall be substantially equal in amount or be so arranged that no instalment is substantially greater in amount than any preceding instalment, and (iii) shall be payable at approximately equal intervals not exceeding one month. (d) Statement of the Borrower.— N o Registrant shall make any instalment loan, except under the provisions o f section 10(a ), unless he shall have accepted in good faith a signed Statement of the B or rower as to the purposes o f the loan. Such Statement shall state whether or not any of the proceeds o f the loan are to be used to make a down payment bn the purchase of a listed article or to be used to purchase any listed article having a cash price of $15.00 or more, and, if any of the proceeds of the loan are to be so used, such State ment shall identify such listed article and shall state the cash price thereof and the value of any trade-in. Such Statement shall state also whether or not any of the proceeds o f the loan are to be used to reduce or retire any instalment sale or instalment loan, or any single-payment loan which is subject to this regulation, or any charge account arising in whole or in part from the sale of a listed article, and, if any o f the proceeds are to be so used, shall state the amount of such obligation and the terms of payment. If a Registrant relies in good faith on the facts set out by the obligor in such Statement, it shall be deemed to be correct for the purposes of the Registrant. (The Registrant, at his option, may use either his own form or the most recent Statement of Borrower form prescribed by the Board.) SECTION 7. SINGLE-PAYMENT LOANS Except as otherwise permitted by this regulation, each single-pay ment loan shall com ply with the following requirements: (a) Single-pavment Loans to Purchase Listed Articles.— If the Registrant knows or has reason to know that the proceeds o f a singlepayment loan (defined to exclude loans of more than $1,500) are to be used to purchase any listed article having a cash price o f $15.00 or m ore: (1) The principal amount lent (excluding any interest or finance charges and the cost of any insurance) shall not exceed two-thirds o f the cash price of the listed article, except that: (i) listed (ii) fifths This requirement does in Group C of section The principal amount o f the cash price of a Group B of section 1 3(a). not apply in the case o f articles 1 3 (a ); and lent may be not more than fourpiano or furniture as defined in 14 REGULATION W In any case involving a used automobile or any article on which there is a trade-in by the purchaser, the maximum amount which may he lent shall be computed in accordance with the applicable provisions of section 13; and (2 ) The maturity shall not exceed 90 days, except as permitted by section 9. ( b ) Single-payment Loans Not to Purchase Listed Articles.— In the case of a single-payment loan (defined to exclude loans o f more than $1,500) not subject to section 7 (a ), the maximum maturity shall not exceed 90 days, except as permitted by section 9. (c) Renewals and Extensions.— A single-payment loan (defined to exclude loans of more than $1,500) made originally on or after M a y 6, 1942, may not be renewed or extended except as follows: (1) A sin gle-p a ym en t loan m ade on or a fte r M ay 6, 1942 m ay be ren ew ed or exten ded b y m eans o f an instalm en t loan com p ly in g w ith the req u irem en ts o f section s 6 (a) or 6( b) and 6 (c) ( 2 ) w ith the m aturity'' calculated fr o m the date on w h ich th e origin al sin gle-p a ym en t loan w as m a d e ; (2) A single-pavment loan made on or after M a y 6, 1942 may be renewed or extended by a series of obligations each o f which has a maturity of not in excess of 90 days if the last o f such obligations matures not later than the date on which an instal ment loan made for a similar purpose would have matured 5 and the borrower pays at the time of each such renewal or extension enough to reduce the unpaid balance to an amount not greater than would have been permitted if the loan had been an instal ment loan subject to the provisions of section 6 (a) or 6 (b ) ;a n d (3) Nothing in this regulation shall be construed to prevent the Registrant from making any renewal or revision or taking any action that he shall deem necessary in good faith !i) with re spect to any ob ligation 'of any member or former member of the armed forces of the United States incurred prior to his induction into such service, or (ii) for the Registrant's own protection in connection with any obligation which is in default and is the subject of bona fide collection effort by the Registrant. (d) Statement o f the B orrow er/'— N o Registrant shall make any 5 T h e m a x im u m m a t u r it y is 6 , 1 2 , 1 5 , o r 1 8 m o n t h s fr o m th e. d a te o f th e d e t e r m in e d b y its p u r p o s e , e x c e p t t h a t 1 8 m o n t h s fr o m th e d a te o f ren e w a l o r m is s ib le w ith a S ta te m e n t o f N e c e s s it y p iy s u a n t t o s e c t io n 1 0 ( d ) . 8 T h is b u s in e s s p ro ce e d s r e q u ir e m e n t d o e s n o t a p p ly t o a s in g le -p a y m e n t lo a n m a d e fo r e n te r p r is e o r fo r a g r ic u ltu r a l p u r p o s e s t o a p erson e n g a g ed in a re t o b e u s e d t o p u r c h a s e a lis te d a r tic le . o r ig in a l lo a n as e x te n s io n is p e r b u s in e s s p u r p o s e s t o a a g r i c u l t u r e , u n l e s s tin * R E G U L A T IO N W 15 single-payment loan, except under the provisions of section 7 (c), unless he shall have accepted in good faith a signed Statement of the Borrower as to the purposes of the loan. Such Statement shall state whether or not any of the proceeds of the loan are to be used to make a down payment on the purchase of a listed article or to be used to purchase any listed article having a cash price of 815.00 or more, and, if any of the proceeds of the loan are to be so used, such Statement shall identify such listed article and shall state the cash price thereof and the value of any trade-in. If a Registrant relies in good faith on the facts set out by the obligor in such Statement, it shall be deemed to be* correct for the purposes of the Registrant. (The Registrant, at his option, may use either his own form or the most recent Statement of Borrower form prescribed by the Board.) (e) Loans Payable on Demand.— A single-payment loan made on or after May 6, 1942, which is payable on demand shall be treated for the purposes of this regulation as if it matured 90 days after the date on which it was made. (/) Credit to Retire Obligations Held Elsewhere.—Any single payment loan, the proceeds of which a Registrant knows or has reason to know will be used in whole or in part to retire any single-payment loan not held by such Registrant, shall be subject to the provisions of this regulation to the same extent as if the obligation being retired were held by the Registrant. SECTION 8. EXCEPTIONS This regulation shall not apply to any of the following: (o ) Real Estate and Home Improvement Loans.— A n y e x te n sion o f cred it w hich is fo r the p urpose o f financing or refinan cin g ( 1 ) the con stru ction or p u rch a se o f an en tire residen tial building or oth er en tire stru ctu re or ( 2 ) repairs, a lteration s, o r im p ro v e m ents upon urban, suburban or rural real p rop e rty in con n ection w ith e x istin g stru ctu res. (b) Security Loans and Credits.— Any extension of credit on se curities which is subject to the Board’s Regulation T (relating to Exten sion and Maintenance of Credit by Brokers, Dealers, and Members of National Securities Exchanges), or subject to the Board’s Regulation U (relating to Loans by Banks for the Purpose of Purchasing or Carry ing Stocks Registered on a National Securities Exchange), or any other extension of credit for the purpose of purchasing or carrying stocks, bonds or other investment securities. (c) Educational. Hospital. Medical. Dental, ami Funeral Expenses. — Any loan as to which the Registrant accepts in good faith a written statement signed by the borrower certifying: (1) That the proceeds are to be used for bona fide educational. 16 REGULATION W m edical, hospital, dental, o f funeral expenses, or to p a y debts in curred for such expenses; (2) That his income available for the purpose is such that he could not reasonably meet the requirements o f this regulation otherwise applicable; and (3) That failure to obtain the extension o f credit would cause undue hardship to him or his dependents. Such a statement by the borrower must set forth specifically the facts relied upon to bring the loan within this exception; and the facts recited therein shall be deemed to be correct for the purposes of this regulation if the statement is accepted by the Registrant in good faith. ( d ) Military Aircraft Credits.— Any extension of credit to finance the purchase of military aircraft other than a primary trainer. (e) Credit to Dealers.— Any extension o f credit to a dealer (in cluding a wholesaler, retailer, and a plumbing, electrical, heating or other contractor) to finance the purchase of any article for resale or installation. (/) Fire and Casualty Insurance Premiums.— Any loan which is made for the purpose of financing a premium in excess of one year on a fire or casualty insurance policy, if the proceeds are paid directly to the insurance agent, broker, or company issuing or underwriting the insurance and the extension o f credit is fully secured by the unearned portion of the premium so financed. (¡7) Disaster Credits.— Any extension of credit made by the Disaster Loan Corporation; or any extension of credit to finance the repair or replacement of real or personal property damaged or lost as a result of a flood or other similar disaster which the Federal Reserve Bank of the district in which the disaster occurs finds has created an emergency affecting a substantial number of the inhabitants of the stricken area, provided such extension is made prior to the end of the sixth calendar month following the month in which the disaster is found to have oc curred and a statement describing the damage or loss is preserved in the Registrant’s files. (/?) Agricultural Loans.— Any loan to a person engaged in agri culture, or to a cooperative association of such persons, if it (1) is made by the Land Bank Commissioner on behalf of the Federal Farm Mortgage Corporation or by any Federal land bank and is found, pursuant to regulations issued by the Commissioner, to be necessary to maintain or increase production of essential agri cultural commodities, or (2) is approved by the Farm Security Administrator or his authorized agent as being necessary for the rehabilitation of a needy farm family, or (3) is for general agricultural purposes and is not for the purpose of purchasing any listed article. In determining whether an extension of credit R E G U L A T IO N W 17 m eets th e description o f clause (3 ) above, a R e g istra n t m a y a ccep t in g ood fa ith a w ritten statem en t sign ed b y th e o b lig o r settin g fo r th the fa c ts relied upon to b rin g it w ith in th e d escrip tion, and th e fa c ts set fo r th in such statem en t shall be deem ed to be co r re c t f o r the p u rp oses o f th is regu lation . (i) Business Loans.— Any loan for business purposes to a busi ness enterprise which is not for the purpose o f purchasing a listed article. (j) Insurance P olicy Loans.— Any loan made by a life insurance com pany which is fully secured by the loan value or cash surrender value o f a life insurance policy issued by such com pany; any loan made by any Registrant on the security of the loan value or cash surrender value of a life insurance policy for the purpose of enabling the borrower to pay off a policy loan made by the insurer prior to M ay 6, 1942 ; and any renewal or extension of any such loan which does not involve an increase in the amount of the loan. (fc) Credit to Governmental Agencies and Religious, Educational or Charitable Institutions.— Any extension of credit to the Federal Government, any State government, any political subdivision, or any department, agency or establishment thereof, or to any church, hospital, clinic, sanitarium, school, college, or other religious, educational, charitable, or eleemosynary institution. (I) Railroad Watches.— A n y exten sion o f cre d it to finance the purch ase o f a railroad standard w atch (w h eth er new or u sed) b y a railroad tim e service em ployee, p rovid ed the R e g istra n t obtain s a statem en t signed b y th e d ivision su perin ten d ent o f th e railroad b y w h ich th e p urch aser is em p loyed c e r tify in g th a t th e p u rch a ser is req u ired to ca rry such a w a tch in the p erform a n ce o f his duties and has no w atch suitable fo r the purpose. (w) Com m odity Credit C orporation.— Any extension of credit made by the Com m odity Credit Corporation or made by a Registrant in accordance with a loan program formulated and administered by the Com m odity Credit Corporation. (n) Loans to Indians.— Any extension of credit made in accordance with regulations of the Secretary of the Interior for the economic development or rehabilitation of Indians. • ( o) Servicemen’s Guaranteed Loans.— A ny extension of credit guar anteed in whole or in part by the Administrator of Veterans’ Affairs pursuant to the provisions of Title III of the Servicemen’s Readjustment A ct of 1944, or by any State agency pursuant to similar State legislation. 18 R E G U L A T IO N \V (p) Demonstrators.— A n y exten sion o f cred it w h ich is to be repaid w ithin n ot m ore than 12 m on th s and is m ade to a bona fide salesm an o f au tom obiles in ord er to finance the p u rch a se o f a new au tom obile to be used b y him p rincip ally as a d em on strator. S E C T IO N 9. SEASON AL A D JU STM E N TS Notwithstanding any other provision of this regulation, appropriate seasonal adjustments may be made in connection with the contractual time of payment of any extension of credit, in accordance with the following provisions: (а) Intervals of Payments.— When appropriate for the purpose of facilitating payment in accordance with the obligor’s main source of income, the payment schedule in connection with any instalment credit may reduce or omit payments over any period or periods totaling not more than 4 months, if the other payments are increased in such man ner as to meet all the other requirements of this regulation applicable to such instalment credit. (б) Farmers and Stock Raisers.— When appropriate for the purpose of facilitating payment in accordance with the seasonal nature of the obligor’s main source of income, any instalment credit which is made to a person who is engaged in agriculture or stock raising and derives his income principally therefrom may be payable in any amounts and at any intervals, if: (1) The instalment credit complies with the applicable provisions of this regulation concerning the amount and maximum maturity of the credit, and (2) at least one-half of the credit is to be repaid within the first half of the applicable maximum maturity. If the purchaser or borrower be known to the Registrant customarily to receive 75 per cent or more of his income during one or two seasons of the year from farming or stock raising, (1) his charge account shall not be deemed to be in default unless the articles previously purchased in the account shall not have been paid for in full within 10 days after the end of the next calendar month during which most of his annual or semi-annual income is customarily received, (2) any single-payment loan made to him may be made to mature during the next calendar month in which most of his annual or semi-annual income is customarily received, and (3) the schedule of payments in connection with any instalment credit extended to him may be arranged so that the instal ment payments will fall due during the calendar months in which most of his annual or semi-annual income is customarily received; but each such extension of credit shall mature not later than 12 months from the date on which it was originally extended. (c) Other Persons with Seasonal Incomes.—If the Registrant has accepted from the purchaser or borrower in good faith a written state R E G U L A T IO N 19 W ment to the effect that such purchaser or borrower customarily receives 75 per cent or more of his income during one or two specified seasons of the year from seasonal labor, investments, trust funds, or other seasonal sources, (1) his charge account shall not be deemed to be in default unless the articles previously purchased in the account shall not have been paid for in full within 10 days after the end of the next calendar month during which most of his annual or semi annual income is customarily received, (2) any single-payment loan made to him may be made to mature during the next calendar month in which most of his annual or semi-annual income is customarily received, and (3) the schedule of payments in connection with any instalment credit extended to him may be arranged so that the instal ment payments will fall due during the calendar months in which most of his annual or semi-annual income is customarily received; but each such extension of credit shall mature not later than 12 months from the date on which it was originally extended. S E C T IO N 1 0 . R E N E W A L S , R E V IS IO N S , A N D A D D IT IO N S O F I N S T A L M E N T C R E D IT (а) Renewals or Revisions.—If any obligation evidencing any instalment sale or instalment loan is renewed or revised by a Regis trant, such renewal or revision must not have the effect of changing the terms of repayment to terms which this regulation would not have permitted in the first instance for such credit;7 but nothing in this regulation shall be construed to prevent any Registrant from making any renewal or revision, or taking any action that he shall deem necessary in good faith, (1) with respect to any obligation of any member or former member of the armed forces of the United States incurred prior to his induction into such service, or (2) for the Registrant’s own protection in connection with any obligation which is in default and is the subject of bona fide collection effort by the Registrant. (б) Additions to Outstanding Credit Held by Registrant.— An ob ligation evidencing any. instalment sale 8 or instalment loan shall not be consolidated with any obligation or obligations held by the Regis trant evidencing any prior instalment sale or instalment loan to the same obligor, unless the additional credit complies with the down payment or maximum credit limitations applicable thereto (if any) and, in addition, the consolidated obligation complies with one of the following options: 7 I f there should b e' any arrearage under an instalm ent co n tra ct w hich do e s not arise ou t of any p rearrangem ent o r plan to evade this regu lation , the arrearage m ay be div id ed equ a lly a m o n g and add ed to the rem ain ing paym ents scheduled fo r the liqu idation o f the credit to w h ich such arrearage relates. T h is applies to any renew al, revision o r con so lid a tio n effected in a cco rd a n ce w ith any p rov ision o f section 10. W h e n e v e r the reg u lation is am ended to increase the m ax im u m m atu rity for any class o f transaction s, the term s o f repaym ent “ perm itted in the first in sta n ce ” in so far as they relate to the m axim um m aturity, fo r such class o f tran saction s shall be deem ed to be the term s app licable u nd er the p ro v is io n s o f the am endm ent. " T h e v e r s io n te rm “ in s tillm e n t s a le ” a s h e r e u s e d in c lu d e s o f ¡1 c h a r g e a c c o u n t t o a i l i n s t i l l m e n t b a s i s . n il in s ta lm e n t c r e d it r e s u ltin g fr o m th e c o n 20 R E G U L A T IO N W Option 1. The terms of the consolidated obligation shall be such as would have been necessary to meet the requirements of this regulation if the several obligations had not been consoli dated, except that, in order to schedule payments at approximately equal intervals, the consolidated obligation may combine pay ments that would otherwise have fallen due at different times within any monthly period, but the first of such combined pay ments shall fall due within one month after such consolidation; or Option Z. The consolidated obligation shall provide fo r a rate o f paym ent (not less than $5.00 per month or $1 .2 5 per week) throughout its'term , which is (i) at least as large per month as the rate o f paym ent or payments on the outstand ing obligation or obligations being consolidated would have been fo r the month com m encing on the date o f consolidation,0 and (ii) is larger to whatever extent may be necessary in order to repay the consolidated obligation within 12 months, or within 18 m onths in case the consolidated obligation is an instalment loan and no part o f the proceeds o f the additional credit is to be used to purchase any listed article having a cash price o f $15.00 or more. (c) Credit to Retire Instalment Obligations Held Elsewhere.—Any instalment loan, the proceeds of which a Registrant knows or has reason to know will be used in whole or in part to retire any instal ment sale 10 or instalment loan not held by such Registrant, shall be subject to the provisions of this regulation to the same extent as if the obligation being retired were held by the Registrant. (d ) Statement of Necessity to Prevent Undue Hardship.— Not withstanding any other provision of this regulation, if a Registrant accepts in good faith a Statement of Necessity as provided in the following paragraph, the renewed, revised or consolidated obligation may provide for a schedule of repayment as though it were a new instalment loan subject to section 6 (6 ), except that the payments need not be as large as $5.00 per month or $1.25 per week, even though such action results in the reduction of the rate of repayment thereon. The requirements of a Statement of Necessity will be complied with only if the Registrant accepts in good faith a written statement signed by the obligor that the contemplated renewal, revision or other action is necessary in order to avoid undue hardship upon the obligor or his dependents resulting from contingencies that were unforeseen by him at the time of obtaining the original extension of credit or which were beyond his control, which statement also sets forth briefly n If any part o f the consolida ted ob lig a tio n is used t o reduce or retire a charge account or sin gle paym ent loan, under th e p rovisions o f section 6 ( b ) or 7 (c )(1 ), such part shall be treated fo r the purpose o f this O ption as if the charge account or sin gle-p ay m en t loan were payable in six equal m on th ly instalm ents. 10 T h e term “ instalment sa le ” as here used includes an instalm ent credit resulting from th e c o n version o f a charge account t o an instalm ent basis. R E G U L A T IO N W 21 the principal facts and circumstances with respect to such contin gencies and specifically states that the renewal, revision, or other action is nut pursuant to a preconceived plan or an intention to evade or circumvent the requirements of this regulation. S E C T IO N 11. E V A S IV E D E V IC E S P R O H IB IT E D (a) Evasive Side Agreements.— No extension of credit complies with the requirements of this regulation if at the time it is made there is any agreement, arrangement, or understanding by which the obligor is to be enabled to make repayment on conditions inconsistent with those required by this regulation, or which would otherwise evade or circumvent, or conceal any evasion or circumvention of, any require ment of this regulation. (b) Loans to Make Down Payments.— A Registrant shall not make any instalment loan or single-payment loan if he knows or has reason to know that any part of the proceeds thereof is to be used to make a down payment on the purchase price of any listed article. (c) Side Loan to Make Down Payment on Listed Article.— A Regis trant shall not make an extension of credit to finance the purchase of any listed article if he knows or has reason to know that there is, or that there is to be, any other extension of credit in connection with the purchase of the listed article which would bring the total amount of credit extended in connection with such purchase beyond the amount permitted by this regulation; but, if the Registrant accepts in good faith a written statement signed by the obligor that no such other extension exists or is to be made, such statement shall be deemed to be correct for the purposes of this regulation. (d) Purchase of Article in Lieu of Trade-in.—Anything which the seller of a listed article buys, or arranges to have bought, from the purchaser at or about the time of the purchase of the listed article shall be regarded as a trade-in for purposes of this regulation. (e) Coupon Plans.— No coupon, ticket or similar medium of credit, whether paid for in instalments or otherwise, shall be accepted by any Registrant in payment, in whole or in part, for any listed article if such acceptance, in effect, would permit the article, to be sold on terms not complying with the requirements of this regulation. S E C T IO N 12. M IS C E L L A N E O U S P R O V IS IO N S (a) Clerical Errors.—Any failure to comply with this regulation resulting from a mistake in determining, calculating, or recording any price, down payment, or extension of credit, or other similar matter, shall not be construed to be a violation of this regulation 22 R E G U L A T IO N W if the Registrant establishes that such failure to comply was the result of excusable error and was not occasioned by a regular course of dealing. (b) Extension of Credit for Mixed Purposes.— In case an extension of credit is partly subject to one section of this regulation and partly subject to another section, the amount and terms of such extension of credit shall be such as would result if the credit were divided into two or more parts and each part were treated as if it stood alone. In case an extension of credit is partly subject to this regulation and partly not subject to the regulation, the amount and terms of such extension of credit shall be such as would result if the credit were divided and the part subject to the regulation were treated according to the applicable provisions of the regulation; the part not subject to the regulation may be treated as if the regulation did not exist. (c) Calculating Maximum Maturity of Instalment Contract.— In calculating the maximum maturity of an instalment sale or instalment loan, a Registrant may, at his option, use any date not more than 15 days subsequent to the actual date of the sale or loan. (d) “ Lay-away” Plans.— With respect to any extension of credit involving a bona fide “ lay-away” plan, or other similar plan by which a purchaser makes one or more payments on an article before receiv ing delivery thereof, the Registrant may, for the purposes of this regu lation, treat the extension of credit as not having been made until the date of the delivery of the article to the purchaser. (e) Contracts and Obligations Outstanding on September 1, 1941.— Nothing in this regulation shall prevent the performance of any valid contract or obligation entered into prior to September 1, 1941; but, when any obligation arising out of any extension of credit made prior to September 1, 1941, has been combined with any extension of credit made on or after September 1, 1941, or has been the subject of any renewal or revision made on or after such date, such extension of credit shall thereafter be treated for the purposes of this regulation as having been made on the date of such consolidation, renewal or revision. (/) Transactions Subjected to Regulation by Amendment.— When ever this regulation is amended to add any article to the list of arti cles specified in section 13(a) or so as to apply to any additional class of transactions, the amendment shall not prevent the perform ance of any valid contract made prior to the effective date of the amendment; but any renewal, revision o r . consolidation of any obligation growing out of an extension of credit covering such newly added article or class of transactions shall be subject to the applicable requirements of this regulation, and, for the purposes of the applicable R E G U L A T IO N W provisions regarding renewals, revisions and consolidations, the terms of repayment “ permitted in the first instance” for such an obligation shall be deemed to be those applicable tp such an extension of credit under such amendment. (<;) Payments Arising out of Loans on Pledged Obligations.— With respect to any loan on the security of an obligation which arises out of an extension of credit subject to this regulation, the prohibitions of this regulation shall be deemed to apply only to payments arising out of the obligation rather than to payments arising out of the loan. ( h ) Preservation of Records.— Every Registrant shall preserve, for the life of the obligation to which they relate, such books of ac count, records, and other papers (including any statements required by or obtained pursuant to this regulation) as are relevant to estab lishing whether or not an extension of credit within the scope of this regulation was in conformity with the requirements thereof, provided, however, that the Statement of the Borrower obtained pursuant to section 6 (d) or 1(d) shall be preserved for the life of the obligation to which it relates or for one year, whichever period is longer, and provided further that the Registrant may preserve photographic reproductions in lieu of such books of account, records or papers. (t) Inspections and Production of Records.—For the purpose of determining whether or not there has been compliance with the re quirements of this regulation, every person required to be licensed under section 3 shall permit the Board or any Federal Reserve Bank, by its duly authorized representatives, to make such inspections of his business operations as the Board or Federal Reserve Bank may deem necessary or appropriate, including inspections of books of account, contracts, letters or other relevant papers wherever located, and, for such purpose, shall furnish such reports as the Board or the Federal Reserve Bank may require. When ordered to do so by the Board, every such person shall furnish, under oath or otherwise, such information relative to any transaction within the scope of the Execu tive Order as the Board may deem necessary or appropriate for such purpose, including the production of books of account, contracts, letters or other papers in the custody or control of such person. (;) Transactions Outside United States.— Nothing in this regula tion shall apply with respect to any extension of credit made in Alaska, the Panama Canal Zone, or any territory or possession outside the continental United States. (k) Right of Registrant to Impose Stricter Requirements.—Any Registrant has the right to refuse to extend credit, or to extend less credit than the amount permitted by this regulation, or to require that repayment be made within a shorter period than the maximum per mitted by this regulation. 24 R E G U L A T IO N W (0 Sets and Group? of Articles.— For the purposes of this regula tion, the word “ article” shall be deemed to include any set, group or assembly commonly considered, sold or used as a single unit, if the component parts thereof are sold or delivered at substantially the same time. (m) “ Cycle Billing.” — The provisions of the following paragraph shall be applicable, instead of the provisions of the opening paragraph of section 5 (c), to any Registrant who (1) on M ay 6, 1942, was using a system of recording and billing his charge accounts whereby such .accounts were divided into several groups and a different monthly closing date and monthly billing period was used for each such group, and (2) has received from the Federal Reserve Bank of his district a notification which is still in force stating that the Federal Reserve Bank is satisfied (A) that such billing system makes it impracticable for him to operate under section 5(c) and (B) that it would be im practicable for him, in view of orders of the War Production Board restricting deliveries of office machinery, to change his system over to one that uses the calendar month as the billing period. Such provisions shall be applicable also to any Registrant who shall have established such a system after having received from the Federal Reserve Bank of his district a notification which is still in force stating that the Federal Reserve Bank is satisfied (1) that the system is intended to effectuate operating economies with respect to manpower or office machinery and (2) that its adoption is not for the purpose of circumventing this regulation. A charge account maintained by such Registrant shall be deemed to be in default if any article (whether listed or unlisted) for which credit was extended in such account has not been paid for in full on or before the 40th day following the last day of the applicable monthly billing period during which such article was sold, except as provided in the three numbered paragraphs in section 5 (c). With respect to any article sold in such a charge account, the maximum maturity shall be the period provided in the preceding para graph instead of that provided in section 5(a). (n) Mail Orders.— An instalment sale shall not be deemed to be in violation of section 4(a) if the sale is made upon the receipt of a mail order for one or more articles and the cash deposit received with the order fails by less than $1.00 to equal the sum of the down pay ments required by this regulation for all of the articles included in the order. R E G U L A T IO N S E C T IO N 13. L IS T E D A R T IC L E S , DOW N 25 W PAYM ENTS AND M A X IM U M C R E D IT VALUES (a) Listed Articles.— The following are the articles which are “ listed articles” within the meaning of this regulation: Group A— One-third down and 12 months’ maximum maturity: 1. Air conditioners, room unit. 2. (Deleted - see Group C) 3. A irc ra ft (including g liders) designed fo r a useful load o f 1,000 pounds or less. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Attic ventilating fans. Automobile batteries and accessories. Automobile tires and inner tubes, for passenger automobiles. Bedding, blankets, curtains, draperies, and household linens and towels. Bicycles. Binoculars, field glasses, opera glasses, and hand telescopes. Boats, and inboard and outboard motors designed for use therewith, other than boats or motors designed specifically for commercial use. Clocks, electric or other, designed for household or personal use. Cooking stoves and ranges, designed for household use. Dishwashers, electric, designed for household use. Electric appliances, not elsewhere listed, designed for household or personal use. 15. Floor coverings (including fabric and linoleum type rugs, carpets, mats, and other floor covering materials, whether or not designed to be affixed to the floor). 16. (D eleted-see Group C) 17. 18. 19. 20. 21. 22. 23. 24. Heating stoves and space heaters, designed for household use. Ironers designed for household use. Jewelry (including precious stones and costume jewelry). Lamps designed for household use. Lawn mowers, edgers, and trimmers (whether or not power-driven). (Deleted - see Group C) Luggage, purses, handbags, toilet cases, and umbrellas. M otion picture cameras, projectors, and lenses, designed for film gauges less than 35 mm .; still cameras, projectors, lenses and shutters, and enlargers. 25. Musical instruments not elsewhere listed. 26. Organs, household electric. 27. (Deleted - see Group C) 28. Portable lights, and portable or stationary flood-lighting equipment, de signed for household use. 29. Radio receiving sets, phonographs, or combinations. 30. Refrigerators, mechanical, of less than 12 cubic feet rated capacity. 31. Sewing machines designed for household use. 32. Silverware (including flatware and hollow ware, whether solid or plated). 33. Sports’, athletic, outing, and games’ equipment. 34. Suction cleaners and mechanical carpet sweepers, designed for household use. 35. Tableware and kitchen ware, equipment, and utensils, designed for house hold use (including pottery, porcelain, chinaware, glassware, and cutlery). 36. Washing machines designed for household use. 37. Watches. 38. (Deleted - see Group C) 39. (Deleted-see Group C) 40. Wearing aoparel and furs, non-military, (including footwear, headwear, and haberdashery). 41. Yard goods designed for making garments or for making articles of house hold use. Group B—20 per cent down and 12 months’ maximum m aturity: 1. Furniture, household (including ice refrigerators, bed springs, mattresses, and materials and services employed in reupholstering). 2. Pianos. R E G U L A T IO N 26 W Group C— 18 months’ maximum maturity: 1. (D eleted - see section 8 (a ) ) . Group D— Maximum maturity 15 months; for down payment requirement see section 13 (c): 1. Automobiles (passenger cars designed for the purpose of transporting loss than 10 passengers, including taxicabs). 2. Motorcycles (two- or three-wheel motor vehicles, including motor bicycles). ( b ) Trade-in.— If any article is traded in by the purchaser on an article listed in Group A, the cash down payment shall be one-third of the net price of the article after deducting from the cash price the amount allowed for the trade-in, and such cash down payment shall be obtained in addition to the trade-in. In the case of an article listed in Group B, the cash down payment shall be one-fifth of such net price. In the case of automobiles and other articles listed in Group D, the down payment required by the regulation may be made in the form of cash or in the form of a trade-in, or both. (c) Down Payment on Automobiles and Motorcycles.— For a new or used automobile or a new or used motorcycle, the down payment (which may be in cash or in the form of a trade-in or in both forms) shall be one-third of the cash price. ( d ) Down Payment Where Price is Fixed by Federal Authorities.— In the case of any article for which the Federal price authorities have prescribed a maximum retail price, the amount of credit extended pur suant to the provisions of section 4 shall in no event exceed the amount which would have been permitted if the article had been sold at the maximum retail price. (e) Maximum Amount of Loan.— A loan to purchase an article listed in Group A in connection with which the seller has accepted a trade-in shall not exceed two-thirds of the net price of the listed article after deducting from the cash price the amount allowed for the trade-in, and, in the case of an article listed in Group B, the loan shall not exceed four-fifths of such net price. A loan to purchase a new or used automobile or a new or used motor cycle shall not exceed two-thirds of the cash price. S E C T IO N 14. E N F O R C E A B IL IT Y OF CONTRACTS Except as may subsequently be otherwise provided, all provisions of this regulation are designated, pursuant to section 2 ( d ) of the Executive Order, as being “ for administrative purposes” within the meaning of said section 2 (d ), which provides that noncompliance with provisions of the regulation so designated shall not affect the right to enforce contracts. LIST OF FE D E R A L RESERVE BANKS AN D BRAN CH ES Address Federal Reserve Bank of BOSTON 30 Pearl Street. Boston 6. Massachusetts NEW YORK Buffalo Branch 33 Liberty Street. New York 7, New York 270-276 Main Street, Buffalo 5, New York PH ILAD ELPH IA 925 Chestnut Street. Philadelphia 1. Pennsylvania CLE V E LA N D East 6th Street and Superior Avenue. Cleveland 1, Ohio 4th and Race Streets. Cincinnati 1. Ohio 717 Grant Street. Pittsburgh 19. Pennsylvania Cincinnati Branch Pittsburgh Branch R IC H M O N D Baltimore Branch Charlotte Branch 9th and Franklin Streets, Richmond 13. Virginia Calvert and Lexington Streets. Baltimore 3, Maryland South Tryon and 2nd Streets, Charlotte 1, North Carolina ATLANTA Birmingham Branch 104 Marietta Street. Atlanta 3. Georgia 18th Street and 5th Avenue, North, Birmingham 2, Alabama Church and Hogan Streets. Jacksonville 1, Florida 228 3rd Avenue. North. Nashville 3, Tennessee Carondelet and Common Streets. New Orleans 11, Louisiana Jacksonville Branch Nashville Branch New Orleans Branch CH ICAG O Detroit Branch 230 South LaSalle Street, Chicago 90. Illinois 160 Fort Street, West, Detroit 31, Michigan ST. LOUIS Little Rock Branch Louisville Branch Memphis Branch 411 121 5th 3rd M IN N EA PO LIS Helena Branch 73 South 5th Street. Minneapolis 2. Minnesota Park Avenue and Lawrence Street. Helena. Montana KANSAS C IT Y 10th Street and Grand Avenue, Kansas City 18, Mis souri 17th and Arapahoe. Denver 17, Colorado 226 West 3rd Street. Oklahoma City 1, Oklahoma 1701-5 Dodge Street. Omaha 2, Nebraska Denver Branch Oklahoma City Branch Omaha Branch Locust Street, St. Louis 2. Missouri West 3rd Street. Little Rock. Arkansas and Market Streets. Louisville 1. Kentucky and Jefferson Streets. Memphis 1. Tennessee D ALLAS El Paso Branch Houston Branch San Antonio Branch W ood and Akard Streets. Dallas 13. Texas 351 Myrtle Avenue. El Paso. Texas 1301 Texas Avenue. Houston 1, Texas Navarro and Villita Streets, San Antonio 6. Texas SAN FRANCISCO Sacramento and Sansome Streets, San Francisco 20, California 409 West Olympic Boulevard, Los Angeles 54. Cali fornia 6th and Oak Streets. Portland 8. Oregon 70 East South Temple Street, Salt Lake City 9. Utah 2nd Avenue and Spring Street, Seattle 14, Washington Los Angeles Branch Portland Branch Salt Lake City Branch Seattle Branch FED ERAL RESERVE BANK O F NEW YORK June 11, 1946. REGULATION W Disaster Credits To all Registrants under Regulation IV in Chemung and Steuben Counties, Neiv York, and Others Concerned: Under the authority of section 8 (¿7) of Regulation W, as amended, this bank finds that the flood occurring 011 or about May 29, 1946, has created an emergency affecting a substantial number of inhabitants in Chemung and Steuben Counties, New York. Accordingly, any extension of credit (not otherwise excepted) to finance the repair or replacement of real or personal property damaged or lost as a result of the flood in the aforementioned Counties is exempt from compliance with the provisions of the Regulation. This exemption does not apply to any extension of credit other than that which may be attributed directly to damage or loss as a result of the flood. This exemption applies to all extensions of credit made in accord ance with the aforementioned conditions and made prior to the end of November, 1946, provided a statement describing the damage or loss which gave rise to the extension of credit is preserved in the files of the Registrant making such extension of credit. A llan S proul, President. FEDERAL RESERVE BANK O F NEW YORK June 28, 1946. Semiannual Dividend G entlem en : The board of directors of Federal Reserve Bank of New York has declared a dividend for the six-month period ending June 30, 1946, at the rate of six per centum per annum on the paid-in capital stock of the bank, payable June 28, 1946, to stockholders as shown by the books of the bank at the close of business on that date. Payment of $..................... , the amount of such dividend due you, President,
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