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FED ERAL R E SER VE BANK
O F NEW YORK
f Circular N o. 3 6 1 1 ~
I
L Novem ber 9, 1950 J

R E G U LA TIO N X
R E SID E N T IA L R E A L E STA TE C R E D IT

To all Persons Engaged in the Business o f Extending Real Estate Credit
in the Second Federal Reserve D istrict:

The Board o f Governors o f the Federal Reserve System has extended until December
31, 1950, the time within which letters or other statements, regarding firm commitments made
prior to the effective date of Regulation X , may be sent to Federal Reserve Banks pursuant
to clause (2) of the second sentence o f section G(b) of the regulation. Notwithstanding this
extension, Registrants contemplating sending letters or statements to this Bank pursuant to
clause (2) o f the second sentence of section 6( b) of the regulation are urged to do so at the
earliest possible date.
"V quote below, fo r your information, an interpretation of Regulation X made by the
Ve
Board o f Governors:
It is the view o f the B oard that exemptions under section 5 ( g ) o f Regulation X should not be
granted unless there is a clear showing o f substantial hardship. The mere fact that a builder or other
person may have made substantial commitments or undertakings before August 3 is not sufficient
basis f o r the granting o f an exemption unless he is also able to show that he will suffer substantial
hardship i f he has to com ply with Regulation X in obtaining credit rather than obtaining it on the
basis previously contemplated by him and the Registrant. The builder or other person must also be
able to show that he had contacts or negotiations with a Registrant prior to August 3, 1950, with a view
to possible subsequent agreement fo r extension o f credit to such builder or other person. Section 5 ( g )
relates only to the credit to finance new construction which is extended to the builder or other person
who made substantial commitments or undertakings before A ugust 3 and the provision does not apply
to credit involved in a subsequent sale o f the p roperty by such builder or other person.

Additional copies o f this circular will be furnished upon request.




A

llan

S

proul,

President.

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