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FEDERAL RESERVE BANK OF DALLAS DALLAS. TEXAS 75222 Circular No. 80-64 March 31, 1980 TO BANKS NOT REPORTING UNDER THE SPECIAL CREDIT RESTRAINT PROGRAM: President Carter recen tly announced a broad program designed to moderate and reduce inflationary forces in the United S tates econom y. In addition to fiscal, energy, and other measures, the President, under the term s o f the Credit Control A ct o f 1969, provided the Federal R eserve Board with the authority to exercise special restraints on the growth of certain kinds o f credit. The Federal Reserve Board has established a voluntary Special Credit Restraint Program which applies to all banks in the nation. The highlights o f that program are: 1. Banks are expected to restrain their growth in total loans to a range o f 6-9 percent in 1980. However, within this range the actual growth for individual institutions will be appraised in light o f their location, past growth patterns, their liquidity and capital positions, and other individual circum stances. Similar restraint should be exercised with resp ect to com m itm ents. 2. Within this general constraint, banks are encouraged to maintain reasonable availability o f funds for small businesses, farmers, housing, smaller agriculturally-oriented com m ercial bank correspondents and thrift institutions. 3. Credit for automobile and home improvement loans should be treated normally. 4. Special restraint should be applied to financing o f corporate takeovers or mergers, o f the retirem ent o f corporate stock, o f speculative holding of com m odities or precious m etals, and o f extraordinary inventory accumulation. 5. In establishing the price and non-price term s of bank loans, no sp ecific guidelines or formulas are suggested. However, as appropriate and possible, lending rates and other term s should take account o f the special needs o f small businesses and farmers. In connection with the program, the Federal R eserve is authorized to require reports of certain loan information from banks. At this tim e, only those banks with total assets greater than $1 billion are required to report monthly and banks with total assets from $300 million to $1 billion report quarterly. To reduce the reporting burden on sm aller banks, they are not required to file reports at this tim e. Since the program applies to all banks regardless o f size , the Comptroller o f the Currency and the Federal Deposit Insurance Corporation Banks and others are encouraged to use the following incoming W A T S numbers in contacting this Bank: 1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) have agreed to monitor com pliance with the program in the banks under $300 million through their exam ination procedures. The Special Credit R estraint Program requires widespread support of banks to e ffe c tiv e ly support monetary policy actions to reduce inflation. I encourage you to evaluate your loan portfolio and plans and to promptly develop and im plem ent your strategy for com pliance. Your cooperation with th ese effo rts to restrain inflation will be sincerely appreciated. If you have any questions, please ca ll Richard D. Ingram, Ext. 6333 or Helen E. Holcomb, Ext. 6166 at the Federal Reserve Bank o f Dallas or o fficia ls at the Branches at Houston, San Antonio, or El Paso. Sincerely yours, Ernest T. Baughman President P.S. D etails o f this program were provided to National Comptroller of the Currency and to Nonmember State Banks Deposit Insurance Corporation. The credit restraint pamphlet your Regulations Binder is presently being printed and will shortly. Banks by the by the Federal for inclusion in be distributed
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