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FE D E R A L R E S E R V E BANK
O F NEW YORK

f" Circular No. 3 4 3 9 “1
L

A p ril 22, 1949

J

CONSUMER INSTALMENT CREDIT CONTROL
Amendment No. 4 to Regulation W of the Board of Governors of the
Federal Reserve System

To Registrants under Regulation W
in the Second Federal Reserve District:

The Board o f Governors of the Federal Reserve System has adopted Amendment
No. 4 to Regulation W , effective A pril 27, 1949. F or your information we quote below
from a press statement issued by the B oard of Governors relating to this amendment,
and released for publication on April 23, 1949:
The Board of Governors has modified Regulation W effective Wednesday, April 27, 1949,
making the maximum maturity 24 months instead of 21 months on all extensions of consumer
instalment credit and reducing down payments on all articles of furniture, appliances, etc., from
15 per cent to 10 per cent. The one-third down payment required on automobiles is retained.
Furniture, appliances, and other articles costing less than $100 are exempted from the scope
of the regulation. Previously articles costing less than $50 were exempted.
In commenting on the Board’s action, Chairman McCabe said:
“ This further step in liberalization of the regulation of consumer instalment credit is
in conformity with the Board’s policy of using flexibly credit and monetary authority
entrusted to the Reserve System. It is in accordance with the System’s broad purpose of
contributing to the national objective of stable economic progress.
“ Most of the commodities subject to the regulation are now in supply at prices more
favorable to the consumer than prevailed last year. Although the regulation is of limited
scope, as it affects only a relatively small segment of the credit structure, nevertheless it
has made a worthwhile contribution to the maintenance of sound credit conditions and
helped to prevent the consuming public from contracting an excessive amount of instal­
ment debt during the period of inflation.
“ In relaxing the regulation at this time the Board had in mind not only current
credit developments and current trends in employment and business but also the relation
of the total volume of instalment credit to national income. Any increase in that credit
to which relaxation of the regulation might contribute would not under present circum­
stances be a significant element in reviving inflationary pressures. If, however, such a con­
dition were to arise again, I am sure the Board would act promptly to meet the situation. ’ ’

A printed copy o f Amendment No. 4 to Regulation W is enclosed; additional copies
may be obtained upon request.




A

llan

S proul,

President.

AM ENDM ENT NO. 4 TO REGULATION W

ISSUED B Y T H E BOARD OF GOVERNORS OF T H E FEDERAL RESERVE S Y S TE M

Regulation W is hereby amended in the following respects, effective
April 27, 1949:
1. By changing “ $50.00” in Part 1 of the Supplement to read
“ $ 100 .0 0 ” .

2. By changing “ 15 per cent” and “ 85 per cent” in Part 1,
Group B of the Supplement to read, respectively, “ 10 per cent” and
“ 90 per cent” .
3. By changing Part 2 of the Supplement to read as follows:
“ Part 2. Maturities.— The maximum maturity for all listed
articles and for unclassified instalment loans is 24 months.”

4. By changing the figure “ 2 4 ”
Supplement.




to “ 2 7 ”

in Part 3 of the


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102