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FE D ERAL R E SE R V E BANK
O F N E W YO R K
J" Circular No. 3 7 3 9 1
L
July 31, 1951
J

CONSUMER CREDIT
Am endm ent No. 4 to Regulation W o f the B oard o f Governors
o f the Federal Reserve System, Effective July 31, 1951

To all Persons Concerned with Regulation W
in the Second Federal Reserve District:

The B oard o f G overnors o f the F ederal R eserve System has approved Am endment No. 4
to R egulation W , effective J u ly 31, 1951. F ollow in g is the text o f the statement issued by
the B oard o f G overnors relating to the amendment, and released fo r immediate publication:
The Board o f Governors today amended the terms o f Regulation W — Consumer Credit— in
accordance with the Defense Production A ct as revised and extended. The Amendment, which is
effective immediately, lengthens the maximum maturity applicable to instalment credit fo r automo­
biles, household appliances, radio and television sets, and furniture from 15 to 18 months, and for
home repair and improvements from 30 to 36 months. Longer maximum maturities are also provided
fo r consumer instalment loans fo r other purposes.
In accordance with the new legislation, down payment requirements for household appliances
and for radio and television sets have been reduced from 25 per cent to 15 per cent. The down p ay­
ments required b y the regulation m ay be made in cash, trade-in, or a combination o f trade-in and
cash. The 10 per cent down payment required fo r home repair and improvements now need not be
obtained prior to com pletion o f the work.
The follow in g table summarizes the revised terms o f the regu lation :
Type o f instalment credit
Automobiles .......................................................................
Household appliances, radio, and television s e t s .. . .
Furniture ...........................................................................
Residential repairs and improvements ......................
Unclassified instalment l o a n s .........................................

Maxim um
maturity

Required
down paym ent
33
15%
15%
10 %

18
18
18
36
18

months
months
months
months
months

In addition, the B oard exempted from the provisions o f Regulation W any instalment credit
required fo r the installation o f sewerage and other related facilities, including plum bing and plum bing
fixtures, where the householder is required to make such installation by local, State or Federal health
and sanitary regulations.

A printed cop y o f Am endm ent No. 4 to Regulation W is enclosed; additional copies may
be obtained upon request.




A

llan

S

proul,

President.

AMENDMENT NO. 4 TO REGULATION W
IS S U E D B Y T H E B O A R D O F G O V E R N O R S OF T H E F E D E R A L R E S E R V E S Y S T E M

Regulation TV is hereby amended in the follow ing respects, effective
J u ly 31, 1951:
(1 ) B y inserting in section 1 follow in g “ Defense Production
A ct o f 1950,” the language “ as am ended,” .
(2 ) B y amending subsection (c ) o f section 3 to read as fo llo w s :
“ (c) T im e o f Down Payment.— The clown payment shall be
obtained at or before the time o f delivery o f the listed a rticle;
except that in the case o f an article listed in Group D, neither
this section 3 ( c ) , section 6 (&), nor section 6 ( / ) shall be deemed
to require compliance in advance o f com pletion o f the agreed
upon repairs, alterations, or im provem ents.”
(3 ) B y inserting in
tion 3 the w ord “ a n d ”
comma after the word
period, and b y deleting

the first sentence
before the figure
“ m onth” at the
the remainder o f

o f subsection (b ) o f sec­
“ (2 ) ” , by changing the
end o f clause ( 2 ) to a
such sentence.

(4 ) B y inserting in the first sentence o f subsection ( c ) o f sec­
tion 4 the w ord “ a n d ” before the figure “ (2 ) ” , by changing the
comma after the w ord “ m onth” at the end o f clause ( 2 ) to a
period, and by deleting the remainder o f such sentence.
(5 ) B y deleting the last sentence o f paragraph (2 ) o f subsec­
tion (a) o f section 5.
( 6 ) B y deleting the last sentence o f the first paragraph o f sub­
section (b ) o f section 5.
(7 ) B y amending item (3 ) in subsection (c ) o f section 6 to
read as follow s:
“ (3 ) The amount o f the purchaser’s down payment (i) in
cash and (ii) in property accepted as trade-in, together with
a brief description identifying such property and stating the
monetary value assigned thereto in good f a it h ;” .
( 8 ) B y amending the last two sentences o f subsection ( c ) of
section 6 to read as follow s:
“ The record need not include a description o f the article if it
is purchased by means o f a coupon book o r similar medium of
instalment credit upon which there has been made a down p ay­
ment at least as great as the down paym ent required b y this
regulation on the article sold by the Registrant. The record need
not include the inform ation called fo r by items (2 ) and (4 ) if
the Registrant is one who, with respect to the article, custom


( over)

ar l quotes t the public a time price only which includes the
iy
o
finance or other charges i any, provided he s t forth s c i time
f
es
ul
price in such record, and provided he obtains a down payment
which i a l a t as large a would be required i the percentage
s t es
s
f
s eci d for the a t c e in the Supplement were applicable t
p fie
ril
o
the time price.”
(9 By amending subsection ( ) of section 6 t read as follows:
)
j
o
“( ) Trade-in.— Any property which the s l e of a l s e
j
elr
itd
a t c e buys or r
ril
eceives in exchange, or arranges t have bought
o
or s r
o eceived, from the purchaser at or about the time of the
purchase of the l s e a t c e s a l be regarded as a trade-in for
itd ril hl
the purposes of t i regulation.”
hs
(10) By adding a the end of section 7 a new subsection (m)
t
reading as follows:
“ ( m) Credit fo r Sewerage Installations.— Any credit for
the purpose of financing the i s a l t o of sewerage and neces­
ntlain
sary related f c l t e (including plumbing and plumbing f x
aiiis
i­
tures), required in order t comply with a s a u e ordinance,
o
ttt,
or regulation of the United S a e , a State or p l t c l subdivi­
tts
oiia
sion t e e f pertaining t health and s n t t o , where the
hro,
o
aiain
Registrant accepts in good f
aith a written statement signed by
the obligor certifyingthat such credit i for the above purpose.’
s
’

(11) By changing “ 25 per cent” and “ 75 per ccnt” in Part 1
,
Group B of the Supplement to read, r s e iv , “ 15 per cent”
e p ct ely
and “ 85 per cent” .
(12) By changing the maximum maturity stated in Part 2 o
f
the Supplement for a t c e l s e in Group A, Group B, Group C
rils itd
and for Unclassified Instalment Loans, r s e ive
e p ct ly, from “15
months” t “18 months”,and for a t c e l s e in Group D from
o
rils itd
“ 30 months” t “36 months”.
o
(13) By changing the figure “ 18” t “21” in Part 3 of the
o
Supplement.
(14) By deleting from the l s sentence in the f r t paragraph
at
is
of Part 4 of the Supplement the language “ in the case of an
automobile”.
(15) By amending the f r tparagraph of Part 5 of the Supple­
is
ment t read as follows:
o
“ Part 5. Calculation o f Down Payments fo r Articles in
Groups B, C, and D. — In the case of any a t c e l s e i
ril itd n
Group B, Group C, or Group D, the required down payment

and the maximum loan value s a l be the s e i i d percentage o
hl
pcfe
f
the cash price of the a t c e Such required down payment may
ril.
be obtained in the form of cash, t a e i , or both.”
rd-n




P R IN T E D

IN

NEW

YORK

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