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FEDERAL RESERVE BANK
OF NEW YORK

r Circular N o. 3 6 7 4 1
L
M arch 20, 1951
J

REAL ESTATE CREDIT
Am endm ent No. 2 to Regulation X o f the B oard o f Governors o f the
Federal Reserve System, E ffective M arch 21, 1951

T o all Persons E ngaged in th e Business o f E xtend in g Beal E state Credit
in th e Second F ederal R eserve D istrict:

The Board o f Governors of the Federal Reserve System has adopted Amendment No. 2
to Regulation X , effective March 21, 1951. W e quote below from the text o f the statement
issued by the Board relating to the amendment and released for publication March 21, 1951:
A n amendment affecting two sections o f Regulation X was announced by the B oard o f Governors
o f the Federal Reserve System with the concurrence o f the H ousing and Home Finance Adm inistrator,
. to become effective March 21, 1951.
The new section 5 (<7) provides that a lim ited number o f builders or other persons who had made
substantial commitments or undertakings with respect to certain contemplated m ulti-unit residential
and nonresidential construction may apply, before A p ril 15, 1951, to a Federal Reserve Bank fo r an
exemption fo r the construction i f they can show that inability to obtain credit to finance the construc­
tion on a basis previously contemplated with a lender would cause a clear and substantial financial
hardship.
Section 5 (k ) o f the regulation form erly provided that credit extended with respect to certain new
construction would be exempt from the regulation if extended p rior to M ay 1, 1951. The amendment,
however, will exempt such credit if it is extended prior to a date 32 days after the construction is
completed.

A printed copy of Amendment No. 2 to Regulation X is enclosed; additional copies will be
furnished upon request.




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R E A L E ST A T E C R E D IT
A M E N D M E N T NO. 2 T O R E G U L A T IO N X
ISSUED BY T H E BOARD OF GOVERNORS OF T H E FEDERAL RESERVE SYSTEM
W IT H T H E CONCURRENCE OF T H E HOUSING AND
H OM E F IN A N C E ADM INISTRATOR

Regulation X is hereby amended in the follow in g respects, effec­
tive March 21, 1951:
1. B y substituting the follow ing subsection ( g ) in section 5 :
(g ) Contem plated Construction.— A n y builder or other per­
son who had made substantial commitments or undertakings
before ( A ) January 12, 1951, with a view to the building o f new
construction which is a m ulti-unit residence or a m ajor addition
or m ajor improvement to a m ulti-unit residence, or (B ) February
15, 1951, with a view to the building o f new construction which
is a nonresidential structure or a m ajor addition or a m ajor
improvement to a nonresidential structure, and who asserts that
his inability to obtain credit to finance such new construction on
the basis contemplated by him and by a Registrant prior to
January 12,1951, or February 15,1951, as the case may be, would
cause him a clear and substantial financial hardship, may apply
to the Federal Reserve Bank o f the district in which the new
construction is contemplated fo r an exemption from this regula­
tion fo r such new construction, showing all the facts and sub­
m itting all necessary supporting documents with respect to his
commitments or undertakings and w hy com pliance with the
regulation would cause him a clear and substantial financial hard­
ship. I f such Federal Reserve Bank after consideration o f the
application and supporting documents determines that substantial
commitments or undertakings were made p rior to January 12,
1951, or February 15, 1951, as the case may be, and that a clear
and substantial financial hardship would result from the applica­
tion o f this regulation in such case, it may issue to such builder
or such other person a certificate approving such application and
thereupon any extension o f credit to such builder or such other
person by the Registrant named in such certificate with respect
to the new construction that may be specified in such certificate
shall be exempt from the prohibitions o f subsections (a ) and ( b )
o f section 4 o f this regulation. A pplications under this subsection
must be sent to the Federal Reserve Bank p rior to A p ril 15, 1951.
2. B y deleting “ M ay 1, 1951,” in subsection ( k ) o f section 5 and
inserting therefor “ a date 32 days after construction is com pleted” .




P R IN T E D I N N E W YORK

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