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federal R e s e r v e Ba n k OF DALLAS Dallas, Texas, October 30, 1948 CONSUM ER CRED IT A M E N D M E N T NO. 1 TO R E G U LA TIO N W T o the R egistrant Addressed and Others Concerned: There is quoted below a press statem ent issued by the Board o f Governors o f the Federal Reserve System fo r release October 28, 1948, in connection w ith Am endm ent No. 1 to Regulation W , effective N ovem ber 1, 1948. This amendment perm its the deliv ery under certain conditions, o f Group B articles fo r trial, ap proval, or dem onstration in anticipation o f an instalment sale w ithout a prior down paym ent. “ The Board o f Governors o f the Federal Reserve Sys tem has adopted an amendm ent to Regulation W — Con sumer Instalment Credit — which will perm it custom er trials o f appliances w ithout prior down paym ent under certain specified conditions. The amendment w hich be com es effective N ovem ber 1, 1948, is designed to reduce certain technical difficulties experienced b y instalment dealers su bject to the regulation, and is not intended to result in any relaxing o f th e credit restrictions. “ It has been the custom fo r som e dealers to deliver appliances and other articles subject to the custom er’s approval or fo r dem onstration purposes. W hen such de liveries w ere made in anticipation o f an instalment sale, the regulation has h eretofore required a down payment at or before the time o f delivery. The amendment provides that i f certain specified conditions are follow ed the seller m ay allow a trial period o f not m ore than ten days w ith out previously obtaining th e down paym ent.” The text o f the amendment is printed on the reverse side. Yours very truly, R. R. GILBERT President (OVER) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) CONSUM ER CREDIT AM E N D M E N T NO. 1 TO R E G U L A TIO N W ISSU ED B Y TH E B O A R D OF G OVERN ORS OF THE F E D E R A L R E S E R V E SYSTEM E ffective N ovem ber 1, 1948, Section 6 (g ) o f Regulation W is amended to read as fo llo w s : “ ( g ) D elivery in Anticipation o f Instalment Sale.— E xcept as provided in the follow in g paragraph, in case a listed article is delivered in anticipation o f an instalment sale o f that article or a similar article (such as a delivery ‘on approval’, ‘on trial’ , or as a ‘dem onstrator’ ) , the regis trant shall require, at or before the tim e o f such delivery, a deposit equal to the down paym ent that would be re quired on such an instalment sale. “ In order to qualify as an exception to the preceding paragraph the article m ust be an article listed in Group B, the delivery m ust be exclusively fo r the purpose o f a bona fide trial, approval, or dem onstration, and the registrant must, within ten days a fter such delivery, obtain the down paym ent referred to in the preceding paragraph or the return o f th e article. E very such case shall be evidenced b y a w ritten agreem ent signed b y the respective parties, o f w hich a copy shall be given the prospective purchaser at or before the delivery o f the article, and such w ritten agreem ent shall clearly and prom inently state that (1) the delivery is exclusively fo r the purpose o f a bona fide trial, approval, or dem onstration, and (2) the prospective pur chaser will make the required down paym ent (the amount o f w hich shall be stated in the agreem ent) within ten days a fter delivery o f th e article fo r trial, approval, or demon stration or will return or release the article within such ten day period. “ In calculating the m aximum m aturity in connection w ith transactions under either o f th e tw o preceding para graphs, the date o f delivery o f the article sold shall be considered the date o f the sale.”
@FedFRASER