The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F ederal
reserve
Bank
OF DALLAS
Dallas, Texas, April 18, 1944 .
To the Bank Addressed:
We enclose a copy of Regulation W as reprinted to include all of the
amendments through Amendment No. 11, which became effective April 3,
1944. It should be substituted for the copy of the Regulation as revised
effective May 6, 1942, and the several amendments, heretofore sent to you.
As you know, section 3(b) of the Regulation provides a general license
for those who are required to be licensed solely because they make charge
sales of listed articles or make single-payment loans. Many merchants who
sell listed articles operate under the general license; they have not regis
tered with us and, therefore, are not on our mailing list. Such merchants
are vitally interested in the changes that have been made in the Regulation,
most of them being in the nature of liberalization, but we have no means
of bringing the changes to their attention except through the press and
through trade journals.
We shall appreciate your bringing these changes to the attention of cus
tomers who may be subject to the Regulation. Copies of the reprinted Reg
ulation will be furnished upon request.
Yours very truly,
R. R. GILBERT
President
^IC TO R Y
BUY
U N IT E D
STATES
WAR
Bo n d s
AND
STAMPS
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
INQUIRIES REGARDING TH IS REGULATION
Any inquiry relating to this regulation should be addressed
to the Federal Reserve Bank or Federal
Reserve branch bank o f the district
in which the inquiry arises.
FOREWORD
(Not a part o f the regulation)
This reprint of the regulation incorporates all amendments to and
including Amendment No. 11, effective April 3, 1944.
Regulation W, issued under authority of the President’s Executive
Order of August 9, 1941, was revised, effective May 6 , 1942, in
compliance with that part of the President’s Special Message to Con
gress on April 27, 1942, which reads:
“ To keep the cost of living from spiraling upward we must
discourage credit and instalment buying, and encourage the pay
ing off of debts, mortgages, and other obligations, for this pro
motes savings, retards excessive buying and adds to the amount
available to the creditors for the purchase of war bonds.”
As revised, Regulation W applies to a comprehensive list of durable
and semi-durable goods for civilian consumption. The Regulation
extends to all types of consumer credit whether in the form of instal
ment sales and instalment loans or in the form of charge accounts and
single-payment loans.
Any inquiry relating to this regulation should be addressed to the
Federal Reserve Bank or the Federal Reserve branch bank of the
district in which the inquiry arises.
REGULATION W
CONSUMER CREDIT
CONTENTS
Sec .
Sec.
Page
1. S cope of R e g u l a t io n .............................................................................................
2. D e f in it io n s .................................................................................................................
Person............................................................................................................
(
Extension of credit...................................................................................
(c) Instalment credit......................................................................................
S ale.................................................................................................................
(e) Instalment sale..................................................... ............................ . . .
(/) Charge sale...................................................................................................
Charge account..........................................................................................
Instalment lo a n ................................
Single-payment lo a n . . ............................................................................
Cash price....................................................................................................
Registrant....................................................................................................
5
5
5
5
6
6
6
6
6
6
6
6
6
3. G e n e r a l R e q u ir e m e n ts an d R e g is t r a t io n ................................................
(a) General requirements...............................................................................
) General license.....................................
(c) Registration................................................................................................
(
Suspension of license...............................................................................
7
7
7
8
8
4. I n sta lm e n t S a l e s .....................................................................................................
(а) Down p aym en t..........................................................................................
(б) M axim um m aturity....................................
(c) Amounts and intervals of instalments.............................................
Statement of transaction.......................................................................
(e) “ Approvals,” “ Demonstrators,” e tc.................................................
8
8
9
9
9
9
(a)
b)
(d)
(g)
(h)
(i)
(j)
(k)
Sec .
(b
d)
Sec.
(d)
Sec.
5. C harge
(а)
(б)
(c)
A c c o u n t s .....................................................................................................
M axim um m aturity.................................................................................
R estriction...................................................................................................
D e fa u lt.........................................................................................................
Curing defaults..........................................................................................
Conversion of charge account into instalment credit prior
to default.............................................................
“ Authorization” of small item s..........................................................
Small defaults............................................................................................
“ Approvals,” “ Demonstrators,” e tc .................................................
11
11
11
11
Sec.
6. I n sta lm e n t L o a n s ...................................................................................................
(а) Instalment loans to purchase listed articles.................................
(б) Instalment loans not to purchase listed articles..........................
(c) Additional requirements........................................................................
Statement of the borrower................................
12
12
12
12
13
Sec.
7. S in g l e -P a y m e n t L o a n s .........................................................................................
Single-payment loans to purchase listed articles........................
(б) Single-payment loans not to purchase listed articles................
(c) Renewals and extensions.......................................................................
Statement of the borrower....................................................................
Loans payable on dem and......... ..........................................................
( /) Credit to retire obligations held elsewhere....................................
13
13
14
14
14
15
15
8. E x c e p t io n s ..................................................................................................................
(a) Real estate loan s.......................................................................................
(
Security loans and cred its...................................................................
(c) Educational, hospital, medical, dental, and funeral expenses. .
Aircraft credits..........................................................................................
(e) Defense housing........................................................................................
( /)
Credit to dealers.......................................................................................
Fire and casualty insurance premiums............................................
Disaster credits.........................................................................................
Agricultural loan s.............................................................
15
15
15
15
16
16
16
16
16
16
(d)
(e)
( /)
(g)
(!h)
(d)
(а )
(d)
(e)
Sec.
b)
{d)
(g)
(h)
(i)
JO
10
10
10
10
CONTENTS
Page
(
Business loans................................................................................
17
( ) Insurance policy loans...................................................................
17
(, ) Credit to Governmental agencies and religious educational
or charitable institutions. ......................................................... 17
(to) Fuel conservation credits............................................................. 17
( ) Railroad watches...........................................................................
17
Commodity Credit Corporation..................................................
17
Loans to Indians............................................................................
18
S e a s o n a l A d j u s t m e n t s ......................................................... ......................
18
Intervals of payments.................................................................... 18
Farmers and stock raisers............................................................
18
(c) Other persons with seasonal incomes.........................................
18
R e n e w a l s , R e v is io n s , a n d A d d it io n s o f I n s t a l m e n t C r e d i t .........
19
(a) Renewals or revisions....................................................................
19
(
Additions to outstanding credit held by Registrant..............
19
(c) Credit to retire instalment obligations held elsewhere...........
20
(i ) Statement of necessity to prevent undue hardship................ 20
E v a s iv e D e v ic e s P r o h i b i t e d ....................................................................
21
Evasive side agreements...............................................................
21
Loans to make down payments................................................... 21
(c) Side loan to make down payment on listed article.................
21
( ) Purchase of article in lieu of trade-in........................................ 21
Coupon plans..................................................................................
21
M is c e l l a n e o u s P r o v is io n s ........................................................................
21
(a) Clerical errors.................................................................................. 21
(
Extension of credit for mixed purposes..................................... 22
(c) Calculating maximum maturity of instalment contract........
22
“Lay-away” plans.......................................................................... 22
(e) Contracts and obligations outstanding on September 1, 1941. 22
(/) Transactions subjected to regulation by amendment. . . . . . . 22
( ) Payments arising out of loans on pledged obligations............ 23
Preservation of records.................................................................. 23
Inspections and production of records.......................................
23
Transactions outside United States...........................................
23
(
Right of Registrant to impose stricter requirements.............. 23
Sets and groups of articles..........................
23
(rn) “ Cycle billing” ........................................................
24
(to) Mail orders......................................................................................
24
L is t e d A r t ic l e s , D o w n P a y m e n t s a n d M a x i m u m C r e d it V a l u e s . . 25
Listed articles.................................................................................. 25
........................................................................................ 25
........................................................................................ 25
........................................................................................
26
........................................................................................ 26
Trade-in..............................................................................
26
(c) Down payment on automobiles and motorcycles.................... 26
(
Down payment where price is fixed by Federal authorities. . 26
(e) Maximum amount of loan............................................................ 26
E n f o r c e a b il i t y o f C o n t r a c t s ..................................................................
27
j)
k
l
Sec.
9.
S e c . 10.
n
(o)
(p)
(a)
(b)
b)
d
S e c . 11.
S e c . 12.
(a)
(b)
d
(e)
b)
(d)
g
(h)
(i)
(j)
k)
(l)
S e c . 13.
(a)
(b)
d)
S e c . 14.
Group A
Group B
Group C
Group D
REGULATION W
As amended effective April 3, 1944
CONSUMER CREDIT
SECTION 1. SCOPE OF REGULATION
This regulation is issued by the Board of Governors of the Federal
Reserve System (hereinafter called the “Board” ) under authority of
section 5(b) of the Act of October 6 , 1917, as amended, and Executive
Order No. 8843, dated August 9, 1941 (hereinafter called the “ Execu
tive Order” ).
The regulation applies, in general, to any person who is engaged in
the business of making extensions of instalment credit, extending credit
in charge accounts, making single-payment loans in amounts of $1,500
or less, or discounting or purchasing obligations arising out of such
extensions of credit. It applies whether the person so engaged is acting
as principal, agent, broker or otherwise, and whether the person is a
bank, loan company, or finance company, or a person who is so en
gaged in connection with any other business, such as by making such
extensions of credit as a dealer, retailer, or other person in connection
with the selling of consumers’ durable or semi-durable goods.1
SECTION 2. D E FIN ITIO N S
For the purposes of this regulation, unless the context otherwise
requires:
( а ) “Person” means an individual, partnership, association, or cor
poration.
( б ) “Extension of Credit” means any loan or mortgage; any instal
ment purchase contract, any conditional sales contract, or any sale or
contract of sale under which part or all of the price is payable sub
sequent to the making of such sale or contract; any rental-purchase
contract, or any contract for the bailment or leasing of property under
which the bailee or lessee either has the option of becoming the owner
thereof or obligates himself to pay as compensation a sum substantially
equal to or in excess of the value thereof; any contract creating any
lien or similar claim on property to be discharged by the payment of
money or its equivalent; any purchase, discount, or other acquisition
of, or any extension of credit upon the security of, any obligation
1 The Executive Order defines “ consumers’ durable good’’ as including “ any good,
or used, which is durable or semi-durable and is used or usable for personal, family
purposes, and any service connected with the acquisition of any such good or of
therein.” Section 13(a) lists the consumers’ durable and semi-durable goods within
the regulation.
whether new
or household
any interest
the scope of
5
6
REGULATION W
arising out of any of the foregoing; and any transaction or series of
transactions having a similar purpose or effect.
(c) “ Instalment Credit” means an extension of credit which the
obligor undertakes to repay in two or more scheduled payments or as
to which the obligor undertakes to make two or more scheduled pay
ments or deposits usable to liquidate the credit, or which has a similar
purpose or effect.
( d ) “ Sale” means a transfer of property for a price in money or its
equivalent which the buyer pays or promises to pay to the seller
for the thing bought or sold. It includes a lease, bailment, or other
transaction which is similar in purpose or effect to a sale.
(e) “ Instalment Sale” means an instalment credit which is made,
as principal, agent or broker, by any seller of any consumers’ durable
or semi-durable good listed in section 13(a) (hereinafter called a
“listed article” ) and which arises out of a sale of such listed article.
(/) “ Charge Sale” means an extension of credit (other than instal
ment credit) which is made, as principal, agent or broker, by any
seller and which arises out of a sale of any article, whether listed or
unlisted.
(<7) “ Charge Account” means the indebtedness arising from charge
sales between the same seller and purchaser.
( h ) “ Instalment Loan” means an instalment credit, other than an
instalment sale, in the form of a loan which is in a principal amount
of $1,500 or less; but the definition does not include any loan u p o n th e
s e c u r i t y o j any obligation which arises out of any instalment sale or
instalment loan.
(f) “ Single-payment Loan” means an extension of credit in the form
of a loan to one or more individuals (other than a partnership), which
is repayable in a single payment whether on demand or on a fixed or
determinable future date, and which is in a principal amount of $1,500
or less; but the definition does not include ( 1) a loan made for business
purposes to a business enterprise which is not for the purpose of pur
chasing a listed article, (2 ) a loan for agricultural purposes to a per
son engaged in agriculture which is not for the purpose of purchasing
a listed article or (3) any loan u p o n th e s e c u r i t y o j any obligation
which arises out of any instalment sale, instalment loan, charge account
or single-payment loan.
(;') “ Cash Price” means the b o n a jid e cash purchase price of an
article, including the b o n a fid e cash purchase price of any accessories,
any b o n a jid e delivery, installation and service charges (other than
interest, finance or insurance charges), and any applicable sales taxes.
(k) “ Registrant” means a person who is licensed pursuant to sec
tion 3.
REGULATION W
7
SECTION 3. GENERAL REQUIREMENTS AND REGISTRATION
( a ) General Requirements.—No person engaged in the business of
making instalment sales,2 charge sales of listed articles, instalment
loans, or single-payment loans, or engaged in the business of lending
on the security of or discounting or purchasing obligations arising out
of such extensions of credit, shall make or receive any payment which
constitutes or arises directly or indirectly out of any such extension
of credit made by him or out of any such obligation lent on or dis
counted or purchased by him, except on the following conditions:
(1 ) He must be licensed pursuant to this section;
(2 ) He must not make or receive any such payment in connec
tion with an extension of credit made by him if he knew or had
reason to know when he made such extension of credit any fact by
reason of which it failed to comply with any requirement of this
regulation applicable thereto;
(3) He must not make or receive any such payment in con
nection with any obligation which he has purchased or discounted
or has accepted as collateral if, at the time he purchased or dis
counted such obligation or accepted it as collateral, it showed on
its face a failure to comply with such requirements or if he knew
any fact by reason of which the extension of credit giving rise to
the obligation failed to comply with such requirements; and
(4) He must not make or receive any such payment in connec
tion with an obligation arising out of an extension of credit which
he has renewed, revised or consolidated, if he knew or had reason
to know when he renewed, revised or consolidated it any fact
by reason of which such renewal, revision or consolidation re
sulted in a failure to comply with such requirements.
( b ) General License.—Whenever this regulation is amended so
that any person who was not formerly subject to section 3(a) becomes
subject thereto, such person is hereby granted a general license; but
such general license shall terminate at the end of the second full cal
endar month after the month in which the amendment becomes effec
tive unless such person has registered in the manner provided in section
3(c) before such termination, except that the general license of a per
son who is required to be licensed solely because he makes charge
sales of listed articles or makes single-payment loans shall not termi
nate until the expiration of the time within which the Board shall, by
public announcement, require such person to register.
Any person whose license is not suspended may become licensed by
registering in the manner provided in section 3(c).
- It is to he noted that the term “ instalment sale” includes only instalment credit arising out of
the sale of listed articles.
8
REGULATION W
(c) Registration.—Registration may be accomplished by filing, with
the Federal Reserve Bank or any branch thereof in the district in
which the main office of the Registrant is located, a registration state
ment on forms obtainable from any Federal Reserve Bank or branch.
( d ) Suspension of License.3—The license of any Registrant may,
after reasonable notice and opportunity for hearing, be suspended by
the Board, in its entirety or as to particular activities or particular
offices or for specified periods, on any of the following grounds:
(1 ) Any material misstatement or omission willfully or negli
gently made in the registration statement;
(2) Any willful or negligent failure to comply with any pro
vision of this regulation or any requirement of the Board pursuant
thereto.
A license which is suspended for a specified period will again become*
effective upon the expiration of such period. A license which is sus
pended indefinitely may be restored by the Board, in its discretion,
if the Board is satisfied that its restoration would not lead to further
violations of this regulation and would not be otherwise incompatible
with the public interest.
SECTION 4 . IN S T A L M E N T SALES
Except as otherwise permitted by this regulation, each instalment
sale shall comply with the following requirements:
(a)
Down Payment.—The down payment shall not be less than
one-third of the cash price of the listed article, except that:
(1 ) In the case of pianos and furniture as defined in G r o u p B
of section 13(a), the down payment need not be more than onefifth of the cash price;
(2) In the case of articles listed in G r o u p C of section 13(a),
no down payment is required; and
(3) In the case of articles the cash price of which is $10.00 or
less, no down payment is required.
In any case involving a used automobile, any article for which the
Federal price authorities have prescribed a maximum retail price,
or any article on which there is a trade-in by the purchaser, the amount
of the down payment must be computed in accordance with the ap
plicable provisions of section 13.
3 In addition, any Registrant who willfully violates or knowingly participates in a violation of
this regulation is subject to the penalties prescribed in section 5(b) of the Act of October 6, 1917.
as amended, which reads in part as follows: “ Whoever willfully violates any of the provisions of
this subdivision or of any license, order, rule or regulation issued thereunder, shall, upon conviction,
be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten
years, or both; and any officer, director, or agent of any corporation who knowingly participates
in such violation may be punished by a like fine, imprisonment, or both.”
REGULATION W
9
( b ) Maximum Maturity.-—The maturity shall not exceed 12 months,
except that, in the case of automobiles and motorcycles as defined in
G r o u p D of section 13(a), the maturity may be not more than 15
months.
(c) Amounts and Intervals of Instalments.—Except as permitted
by section 9, the instalments in which the time balance is payable
(1) shall not be less than $5.00 per month or $1.25 per week on the
aggregate instalment indebtedness of one debtor to the same creditor;
(2 ) shall be substantially equal in amount or so arranged that no in
stalment is substantially greater in amount than any preceding instal
ment; and (3) shall be payable at approximately equal intervals not
exceeding one month.
(d ) Statement of Transaction.—Unless the cash price of the article
sold is $6.00 or less, the instalment sale shall be evidenced by a written
instrument or record, and there shall be incorporated therein or at
tached thereto a written statement, of which a copy shall be given to
the obligor as promptly as circumstances will permit, and which shall
set forth (in any order) the following information:
(1) A brief description identifying the article purchased;
(2) The cash price of the article;
(3) The amount of the purchaser’s down payment (i) in cash
and (ii) in goods accepted in trade, together with a brief descrip
tion identifying such goods and stating the monetary value as
signed thereto in good faith;
(4) The deferred balance, which is the difference between items
(2) and (3);
(5) The amount of any insurance premium for which credit is
extended and of any finance charges or interest by way of dis
count included in the principal amount of the obligation, or the
sum of these amounts;
(6 ) The time balance owed by the purchaser, which is the sum
total of items (4) and (5); and
(7) The terms ol payment.
The Statement of Transaction need not include a d e s c r i p t i o n o f th e
a r tic le if it is purchased by means of a coupon book or similar medium
of instalment credit upon which a cash down payment of at least
one-third of its purchase value has been made.
( e ) “ Approvals,” “Demonstrators,” etc.—In case a listed article
is delivered in anticipation of an instalment sale of that article or a
similar article (such as a delivery “ on approval,” “ on trial,” or as a
“demonstrator” ), the Registrant shall require, at or before the time
of such delivery, a deposit equal to the down payment that would be
required on such an instalment sale.
10
REGULATION W
SECTION 5. CHARGE ACCOUNTS
Except as otherwise permitted by this regulation, each charge sale
and charge account shall comply with the following requirements:
( a ) Maximum Maturity.— Except as permitted by section 9, no
listed article shall be sold in a charge account with an agreement that
payment therefor may be deferred beyond the 10th day of the second
calendar month following the calendar month during which such article
was sold.
( b ) Restriction.—When a charge account is in default, the Regis
trant shall not extend credit to the obligor for any charge sale or
instalment sale of any listed article until the default has been cured
by one of the methods described below.
(c) Default.—A charge account shall be deemed to be in default
if any article (whether listed or unlisted) for which credit was extended
in such account has not been paid for in full on or before the 10th day
of the second calendar month following the calendar month during
which such article was sold, except that:
(1) A charge account shall not be deemed to be in default be
cause of a failure to make payment for any article purchased
therein prior to May 1, 1942, unless such article shall not have
been paid for in full by July 10, 1942;
(2) If an article was sold in a charge account prior to May 1,
1942, under a definite agreement between the seller and purchaser
(evidenced in writing) that such article need not be paid for until
a specified date, the account shall not be deemed to be in default
with respect to such article unless such article shall not have been
paid for in full by the date so agreed upon; and
(3) For persons with seasonal incomes, adjustments are per
mitted in accordance with section 9.
(d) Curing Defaults.—When a charge account is in default, the
default may be cured either:
(1) By payment in full of the amount in default;
(2) By the purchaser entering into a written agreement in good
faith to pay the amount in default within a period of 6 months
or less from the date of such agreement by substantially equal
instalment payments of not less than $5.00 per month or $1.25
per week at substantially equal intervals not exceeding one
REGULATION W
11
month;4 or
(3)
By the purchaser filing with the creditor a Statement of
Necessity in accordance with section 10(d) and entering into a
written agreement in good faith to pay the amount in default
within a period of 12 months from the date of such agreement by
substantially equal instalment payments at substantially equal
intervals not exceeding one month.4
In the case of any charge account obligation of any member or
former member of the armed forces of the United States incurred
prior to his induction into such service, a default may be cured by the
purchaser entering into a written agreement in good faith to make
payment according to such terms as the Registrant shall deem it
appropriate to require.
(e)
Conversion of Charge Account into Instalment Credit Prior
to Default.—If the seller and purchaser agree to convert into an instal
ment credit4 the whole or any part of a charge account arising from the
sale of a listed article the charge for which is not in default, the agree
ment shall be in writing and shall provide that the instalment credit fhall
be retired within 6 months from the date of the agreement by substan
tially equal payments of not less than $5.00 per month or $1.25 per
week, at substantially equal intervals not exceeding one month.
(/) “Authorization” of Small Items.—In case a Registrant makes
a charge sale of a listed article the cash price of which is $10.00 or
less, he shall not be deemed to have violated section 5(6) if the
person authorizing such sale on behalf of the Registrant acts in good
faith without knowledge that the customer’s charge account is in
default, provided the Registrant, promptly upon discovery that such
charge account is in default and in any event within 30 days from
the date of sale, makes a request of the customer that he either return
the article or else pay for it in full immediately.
( g ) Small Defaults.—A charge account shall not be deemed to be
“in default” within the meaning of sections 5(c) or 12 ( m ) if the
amount in default is less than $10.00.
(h ) “Approvals,” “ Demonstrators,” etc.—When a charge account
is in default, the Registrant shall not deliver any listed article to the
obligor in anticipation of a sale of that article or a similar article (such
as a delivery “ on approval,” “ on trial,” or as a “demonstrator” ).
When a charge account is not in default and the Registrant makes
such a delivery of any article, the delivery (unless it is in anticipation
of an instalment sale) shall be treated for the purposes of this regula
tion as a charge sale made on the date of the delivery.
4 Renewals, revisions, and additions of instalment credits growing out of charge accounts are
subject to the provisions of section 10.
12
REGULATION W
SECTION 6. INSTALM ENT LOANS
Except as otherwise permitted by this regulation, each instalment,
loan shall comply with the following requirements:
( a ) Instalment Loans to Purchase Listed Articles.—If the Regis
trant knows or has reason to know that the proceeds of an instalment
loan (defined to exclude loans of more than $1,500) are to be used to
purchase any listed article having a cash price of $15.00 or more:
(1) The principal amount lent (excluding any interest or finance
charges and the cost of any insurance) shall not exceed twothirds of the cash price of the listed article except that:
(i) This requirement does not apply in the case of articles
listed in G r o u p C of section 13 (a ); and
(ii) The principal amount lent may be not more than fourfifths of the cash price of a piano or furniture as defined in
G r o u p B of section 13(a).
In any case involving a used automobile, or any article on which
there is a trade-in by the purchaser, the maximum amount which
may be lent shall be computed in accordance with the applicable
provisions of section 13; and
(2) The maturity shall not exceed 12 months, except that, in
the case of automobiles and motorcycles as defined in G r o u p D
of section 13 (a), the maturity may be not more than 15 months.
(b) Instalment Loans Not to Purchase Listed Articles.—In the case
of an instalment loan (defined to exclude loans of more than $1,500)
which is not subject to section 6(a), the maximum maturity shall not
exceed 12 months; except that, if the Registrant knows or has reason to
know that the proceeds are to be used to reduce or retire a charge
account arising in whole or in part from the sale of a listed article, or
to reduce or retire a single-payment loan which is subject to this regu
lation, the maximum maturity shall not exceed 6 months.
(c) Additional Requirements.— Whether subject to section 6(a)
or section 6(b), the instalment loan shall comply with the following
additional requirements:
(1) It shall be evidenced by a written instrument or record,
and there shall be incorporated therein or attached thereto a writ
ten statement, of which a copy shall be given to the obligor as
promptly as circumstances will permit, and which shall set forth
the terms of payment;
(2) Except as permitted by section 9, the obligation shall be
payable in instalments which (i) shall not be less than $5.00 per
month or $1.25 per week, on the aggregate instalment indebtedness
REGULATION W
13
of the debtor to the creditor, (ii) shall be substantially equal in
amount or be so arranged that no instalment is substantially
greater in amount than any preceding instalment, and (iii) shall
be payable at approximately equal intervals not exceeding one
month.
(d) Statement of the Borrower.—No Registrant shall make any
instalment loan, except under the provisions of section 10(a), unless
he shall have accepted in good faith a signed Statement of the Bor
rower as to the purposes of the loan. Such Statement shall state
whether or not any of the proceeds of the loan are to be used to make
a down payment on the purchase of a listed article or to be used to
purchase any listed article having a cash price of $15.00 or more,
and, if any of the proceeds of the loan are to be so used, such State
ment shall identify such listed article and shall state the cash price
thereof and the value of any trade-in. Such Statement shall state
also whether or not any of the proceeds of the loan are to be used
to reduce or retire any instalment sale or instalment loan, or any
single-payment loan which is subject to this regulation, or any charge
account arising in whole or in part from the sale of a listed article,
and, if any of the proceeds are to be so used, shall state the amount
of such obligation and the terms of payment. If a Registrant relies
in good faith on the facts set out by the obligor in such Statement,
it shall be deemed to be correct for the purposes of the Registrant.
(The Registrant, at his option, may use either his own form or the
most recent Statement of Borrower form prescribed by the Board.)
SECTION 7. S IN G LE-PA Y M EN T LOANS
Except as otherwise permitted by this regulation, each single-pay
ment loan shall comply with the following requirements:
(a) Single-payment Loans to Purchase Listed Articles.—If the
Registrant knows or has reason to know that the proceeds of a single
payment loan (defined to exclude loans of more than $1,500) are to
be used to purchase any listed article having a cash price of $15.00
or more:
(1) The principal amount lent (excluding any interest or
finance charges and the cost of any insurance) shall not exceed
two-thirds of the cash price of the listed article, except that:
(i) This requirement does not apply in the case of articles
listed in G r o u p C of section 13(a); and
(ii) The principal amount lent may be not more than fourfifths of the cash price of a piano or furniture as defined in
G r o u p B of section 13(a).
14
REGULATION W
In any case involving a used automobile or any article on which
there is a trade-in by the purchaser, the maximum amount which
may be lent shall be computed in accordance with the applicable
provisions of section 13; and
(2) The maturity shall not exceed 90 days, except as permitted
by section 9.
(6) Single-payment Loans Not to Purchase Listed Articles.—In
the case of a single-payment loan (defined to exclude loans of more
than $1,500) not subject to section 7 (a), the maximum maturity shall
not exceed 90 days, except as permitted by section 9.
(c) Renewals and Extensions.—A single-payment loan (defined to
exclude loans of more than $1,500) made originally on or after May 6,
1942, may not be renewed or extended except as follows:
(1) A single-payment loan made on or after May 6, 19^2 may
be renewed or extended by means of an instalment loan complying
with the requirements of sections 6(6) and 6(c)(2) with the
maturity5 calculated from the date on which the original single
payment loan was made;
(2) A single-payment loan made on or after May 6, 1942 may
be renewed or extended by a series of obligations each of which
has a maturity of not in excess of 90 days if the last of such
obligations matures not later than the date on which an instal
ment loan made for a similar purpose would have matured 5 and
the borrower pays at the time of each such renewal or extension
enough to reduce the unpaid balance to an amount not greater
than would have been permitted if the loan had been an instal
ment loan subject to the provisions of section 6(6); and
(3) Nothing in this regulation shall be construed to prevent
the Registrant from making any renewal or revision or taking any
action that he shall deem necessary in good faith (i) with re
spect to any obligation of any member or former member of the
armed forces of the United States incurred prior to his induction
into such service, or (ii) for the Registrant’s own protection in
connection with any obligation which is in default and is the
subject of b o n a fid e collection effort by the Registrant.
(d ) Statement of the Borrower.6—No Registrant shall make any
5 The m a tu rity must riot be later than twelve months from the date on which the original loan
was made, except that (1) if the Registrant know or have reason to know that the proceeds were
used to reduce or retire a charge account, the maturity must not be later than six months from
such date, and (2) if the borrower file, and the Registrant accept in good faith, a Statement of
Necessity in accordance with the requirements of section 10(d), the maturity may be not more
than twelve months from the date of such renewal or extension.
6 This requirement does not apply to a single-payment loan made for business purposes to a
business enterprise or for agricultural purposes to a person engaged in agriculture, unless the
proceeds are to be used to purchase a listed article.
15
REGULATION W
single-payment loan, except under the provisions of section 7(c),
unless he shall have accepted in good faith a signed Statement of the
Borrower as to the purposes of the loan. Such Statement shall state
whether or not any of the proceeds of the loan are to be used to
make a down payment on the purchase of a listed article or to be
used to purchase any listed article having a cash price of $15.00 or
more, and, if any of the proceeds of the loan are to be so used, such
Statement shall identify such listed article and shall state the cash
price thereof and the value of any trade-in. If a Registrant relies
in good faith on the facts set out by the obligor in such Statement,
it shall be deemed to be correct for the purposes of the Registrant.
(The Registrant, at his option, may use either his own form or the
most recent Statement of Borrower form prescribed by the Board.)
(e) Loans Payable on Demand.— A single-payment loan made on
or after May 6, 1942, which is payable on demand shall be treated for
the purposes of this regulation as if it matured 90 days after the date
on which it was made.
(/) Credit to Retire Obligations Held Elsewhere.—Any single
payment loan, the proceeds of which a Registrant knows or has reason
to know will be used in whole or in part to retire any single-payment
loan not held by such Registrant, shall be subject to the provisions
of this regulation to the same extent as if the obligation being retired
were held by the Registrant.
SECTION
8. EXCEPTION S
This regulation shall not apply to any of the following:
(a) Real Estate Loans.— Any extension of credit which is secured
by a b o n a fid e first lien on improved real estate duly recorded or
which is for the purpose of financing or refinancing the construction or
purchase of an entire residential building or other entire structure.
( b ) Security Loans and Credits.—Any extension of credit on se
curities which is subject to the Board’s Regulation T (relating to Exten
sion and Maintenance of Credit by Brokers, Dealers, and Members of
National Securities Exchanges), or subject to the Board’s Regulation
U (relating to Loans by Banks for the Purpose of Purchasing or Carry
ing Stocks Registered on a National Securities Exchange), or any other
extension of credit for the purpose of purchasing or carrying stocks,
bonds or other investment securities.
(c) Educational, Hospital, Medical, Dental, and Funeral Expenses.
—Any loan as to which the Registrant accepts in good faith a written
statement signed by the borrower certifying:
(1) That the proceeds are to be used for
b o n a fid e
educational,
16
REGULATION W
medical, hospital, dental, or funeral expenses, or to pay debts in
curred for such expenses;
(2) That his income available for the purpose is such that he
could not reasonably meet the requirements of this regulation
otherwise applicable; and
(3) That failure to obtain the extension of credit would cause
undue hardship to him or his dependents.
Such a statement by the borrower must set forth specifically the facts
relied upon to bring the loan within this exception; and the facts
recited therein shall be deemed to be correct for the purposes of this
regulation if the statement is accepted by the Registrant in good faith.
(d ) Aircraft Credits.—Any extension of credit to finance the pur
chase of aircraft for use in any activity in respect of which a preference
rating of A-10 or higher is in force for deliveries of civil aircraft.
(e ) Defense Housing.—Any extension of credit to remodel or
rehabilitate any structure which the Administrator of the National
Housing Agency, or his authorized agent, shall designate as being for
“ defense housing” as defined by the Administrator. Information re
garding the procedure for obtaining such a designation may be ob
tained through any Federal Reserve Bank or branch.
(/) Credit to Dealers.—Any extension of credit to a dealer (in
cluding a wholesaler, retailer, and a plumbing, electrical, heating or
other contractor) to finance the purchase of any article for resale
or installation.
(p) Fire and Casualty Insurance Premiums.—Any loan which is
made for the purpose of financing a premium in excess of one year on
a fire nr casualty insurance policy, if the proceeds are paid directly
to the insurance agent, broker, or company issuing or underwriting the
insurance and the extension of credit is fully secured by the unearned
portion of the premium so financed.
( h ) Disaster Credits.—Any extension of credit (1) made by the
Disaster Loan Corporation, or (2) to finance the repair or replace
ment of real or personal property damaged or lost as a result of a
flood or other similar disaster which the Federal Reserve Bank of the
district in which the disaster occurs finds has created an emergency
affecting a substantial number of the inhabitants of the stricken area.
( i) Agricultural Loans.—Any loan to a person engaged in agri
culture, or to a cooperative association of such persons, if it (1) is
made by the Land Bank Commissioner on behalf of the Federal Farm
Mortgage Corporation and is found, pursuant to regulations issued by
the Commissioner, to be necessary to maintain or increase production
of essential agricultural commodities, or (2) is approved by the Farm
Security Administrator or his authorized agent as being necessary for
REGULATION W
17
the rehabilitation of a needy farm family, or (3) is for general agri
cultural purposes and is not for the purpose of purchasing any listed
article. In determining whether an extension of credit meets the de
scription of clause (3) above, a Registrant may accept in good faith
a written statement signed by the obligor setting forth the facts relied
upon to bring it within the description, and the facts set forth in such
statement shall be deemed to be correct for the purposes of this
regulation.
(;) Business Loans.—Any loan for business purposes to a busi
ness enterprise which is not for the purpose of purchasing a listed
article.
(k ) Insurance Policy Loans.—Any loan made by a life insurance
company which is fully secured by the loan value or cash surrender
value of a life insurance policy issued by such company; any loan made
by any Registrant on the security of the loan value or cash surrender
value of a life insurance policy for the purpose of enabling the borrower
to pay off a policy loan made by the insurer prior to May 6, 1942; and
any renewal or extension of any such loan which does not involve an
increase in the amount of the loan.
(l ) Credit to Governmental Agencies and Religious, Educational
or Charitable Institutions.—Any extension of credit to the Federal
Government, any State government, any political subdivision, or any
department, agency or establishment thereof, or to any church, hospital,
clinic, sanitarium, school, college, or other religious, educational,
charitable, or eleemosynary institution.
(m) Fuel Conservation Credits.—Any extension of credit to finance
(1) the conversion of heating equipment to the use of any other fuel,
the repair of heating equipment, or the replacement of heating equip
ment if it is worn out, damaged beyond repair, or destroyed, (2) the
installation of loose-fill, blanket, or batt-type insulation, or insulating
board, within existing structures, (3) the installation of storm doors,
storm windows, or weather stripping, or (4) the purchase of materials
for any of the above purposes.
(n) Railroad Watches.—Any extension of credit to finance the pur
chase of a railroad standard watch (whether new or used) by a rail
road time service employee, provided the Registrant obtains a certi
fication with respect to such employee in the form prescribed by Gen
eral Limitation Order of the War Production Board limiting the
transfer of railroad standard watches.
(o) Commodity Credit Corporation.—Any extension of credit made
by the Commodity Credit Corporation or made by a Registrant in
accordance with a loan program formulated and administered by the
Commodity Credit Corporation.
18
REGULATION W
(р ) Loans to Indians.—Any extension of credit made in accordance
with regulations of the Secretary of the Interior for the economic
development or rehabilitation of Indians.
SECTION 9. SEASONAL ADJU STM EN TS
Notwithstanding any other provision of this regulation, appropriate
seasonal adjustments may be made in connection with the contractual
time of payment of any extension of credit, in accordance with the
following provisions:
(a) Intervals of Payments.— When appropriate for the purpose of
facilitating payment in accordance with the obligor’s main source of
income, the payment schedule in connection with any instalment credit
may reduce or omit payments over any period or periods totaling not
more than 4 months, if the other payments are increased in such man
ner as to meet all the other requirements of this regulation applicable
to such instalment credit.
( b ) Farmers and Stock Raisers.—When appropriate for the purpose
of facilitating payment in accordance with the seasonal nature of the
obligor’s main source of income, a n y in s t a l m e n t c r e d it which is made
to a person who is engaged in agriculture or stock raising and derives
his income principally therefrom may be payable in any amounts and
at any intervals, if: (1) The instalment credit complies with the
applicable provisions of this regulation concerning the amount and
maximum maturity of the credit, and (2) at least one-half of the
credit is to be repaid within the first half of the applicable maximum
maturity.
If the purchaser or borrower be known to the Registrant customarily
to receive 75 per cent or more of his income during one or two seasons
of the year from farming or stock raising, (1) his c h a r g e a c c o u n t shall
not be deemed to be in default unless the articles previously purchased
in the account shall not have been paid for in full within 10 days after
the end of the next calendar month during which most of his annual
or semi-annual income is customarily received, (2) a n y s i n g l e - p a y m e n t
lo a n made to him may be made to mature during the next calendar
month in which most of his annual or semi-annual income is customarily
received, and (3) the schedule of payments in connection with a n y
in s t a l m e n t c r e d it extended to him may be arranged so that the instal
ment payments will fall due during the calendar months in which
most of his annual or semi-annual income is customarily received; but
each such extension of credit shall mature not later than 12 months
from the date on which it was originally extended.
(с) Other Persons with Seasonal Incomes.—If the Registrant has
accepted from the purchaser or borrower in good faith a written state
REGULATION W
19
ment to the effect that such purchaser or borrower customarily receives
75 per cent or more of his income during one or two specified seasons
of the year from seasonal labor, investments, trust funds, or other
seasonal sources, (1) his c h a r g e a c c o u n t shall not be deemed to be
in default unless the articles previously purchased in the account
shall not have been paid for in full within 10 days after the end of
the next calendar month during which most of his annual or semi
annual income is customarily received, (2) a n y s i n g l e - p a y m e n t lo a n
made to him may be made to mature during the next calendar month
in which most of his annual or semi-annual income is customarily
received, and (3) the schedule of payments in connection with a n y
in s t a l m e n t c r e d it extended to him may be arranged so that the instal
ment payments will fall due during the calendar months in which most
of his annual or semi-annual income is customarily received; but each
such extension of credit shall mature not later than 12 months from
the date on which it was originally extended.
SECTION 10. REN EW ALS, REVISIONS, AND ADDITIONS OF IN S T A L M E N T CREDIT
(a) Renewals or Revisions.— If any obligation evidencing any
instalment sale or instalment loan is renewed or revised by a Regis
trant, such renewal or revision must not have the effect of changing
the terms of repayment to terms which this regulation would not
have permitted in the first instance for such credit; but nothing in
this regulation shall be construed to prevent any Registrant from
making any renewal or revision, or taking any action that he shall
deem necessary in good faith, (1) with respect to any obligation of
any member or former member of the armed forces of the United
States incurred prior to his induction into such service, or (2) for the
Registrant’s own protection in connection with any obligation which
is in default and is the subject of b o n a fid e collection effort by the
Registrant.
( b ) Additions to Outstanding Credit Held by Registrant.—-An ob
ligation evidencing any instalment sale 7
8 or instalment loan shall not
be consolidated with any obligation or obligations held by the Regis
trant evidencing any prior instalment sale or instalment loan to the
same obligor, unless the additional credit complies with the down
payment or maximum credit limitations applicable thereto (if any)
and, in addition, the consolidated obligation complies with one of the
following options:
7 If there should be any arrearage under an instalment contract which does not arise out of
any ^rearrangement or plan to evade this regulation, the arrearage may he divided equally among
and added to the remaining payments scheduled for the liquidation of the credit to which such
arrearage relates. This applies to any renewal, revision or consolidation effected in accordance
with any provision of section 10.
8 The term “ instalment sale” as here used includes an instalment credit resulting from the con
version of a charge account to an instalment basis.
20
REGULATION W
O p t i o n 1 . The terms of the consolidated obligation shall be
such as would have been necessary to meet the requirements of
this regulation if the several obligations had not been consoli
dated, except that, in order to schedule payments at approximately
equal intervals, the consolidated obligation may combine pay
ments that would otherwise have fallen due at different times
within any monthly period, but the first of such combined pay
ments shall fall due within one month after such consolidation;
or
O p t i o n 2 . The consolidated obligation shall provide for a rate of
payment (not less than $5.00 per month or $1.25 per week)
throughout its term, which is (i) at least as large per month as
the rate of payment or payments on the outstanding obligation
or obligations being consolidated would have been for the month
commencing on the date of consolidation,9 and (ii) is larger to
whatever extent may be necessary in order to repay the consoli
dated obligation within 12 months.
(c) Credit to Retire Instalment Obligations Held Elsewhere.—Any
instalment loan, the proceeds of which a Registrant knows or has
reason to know will be used in whole or in part to retire any instal
ment sale 10 or instalment loan not held by such Registrant, shall be
subject to the provisions of this regulation to the same extent as if the
obligation being retired were held by the Registrant.
( d ) Statement of Necessity to Prevent Undue Hardship.—Not
withstanding any other provision of this regulation, if a Registrant
accepts in good faith a Statement of Necessity as provided in the
following paragraph, the renewed, revised or consolidated obligation
may provide for a schedule of repayment as though it were a new
instalment loan subject to section 6(6), except that the payments
need not be as large as $5.00 per month or $1.25 per week, even
though such action results in the reduction of the rate of repayment
thereon.
The requirements of a Statement of Necessity will be complied with
only if the Registrant accepts in good faith a written statement signed
by the obligor that the contemplated renewal, revision or other action
is necessary in order to avoid undue hardship upon the obligor or
his dependents resulting from contingencies that were unforeseen
by him at the time of obtaining the original extension of credit or
which were beyond his control, which statement also sets forth briefly
!l If any part of the consolidated obligation is used to.reduce or retire a charge account or singlepayment loan, under the provisions of section 6(6) or 7(c)(1), such part shall be treated for the
purpose of this Option as if the charge account or single-payment loan were payable in six
equal monthly instalments.
10 The term “ instalment sale” as here used includes an instalment credit resulting from the con
version of a charge account to an instalment basis.
REGULATION W
21
the principal facts and circumstances with respect to such contin
gencies and specifically states that the renewal, revision, or other
action is not pursuant to a preconceived plan or an intention to evade
or circumvent the requirements of this regulation.
SECTION
11. EVASIVE DEVICES PROHIBITED
(a) Evasive Side Agreements.—No extension of credit complies
with the requirements of this regulation if at the time it is made there
is any agreement, arrangement, or understanding by which the obligor
is to be enabled to make repayment on conditions inconsistent with
those required by this regulation, or which would otherwise evade or
circumvent, or conceal any evasion or circumvention of, any require
ment of this regulation.
( b ) Loans to Make Down Payments.— A Registrant shall not make
any instalment loan or single-payment loan if he knows or has reason
to know that any part of the proceeds thereof is to be used to make a
down payment on the purchase price of any listed article.
(c) Side Loan to Make Down Payment on Listed Article.—A Regis
trant shall not make an extension of credit to finance the purchase
of any listed article if he knows or has reason to know that there is, or
that there is to be, any other extension of credit in connection with
the purchase of the listed article which would bring the total amount
of credit extended in connection with such purchase beyond the
amount permitted by this regulation; but, if the Registrant accepts
in good faith a written statement signed by the obligor that no such
other extension exists or is to be made, such statement shall be deemed
to be correct for the purposes of this regulation.
(d ) Purchase of Article in Lieu of Trade-in.— Anything which the
seller of a listed article buys, or arranges to have bought, from the
purchaser at or about the time of the purchase of the listed article
shall be regarded as a trade-in for purposes of this regulation.
(e) Coupon Plans.— No coupon, ticket or similar medium of
credit, whether paid for in instalments or otherwise, shall be accepted
by any Registrant in payment, in whole or in part, for any listed
article if such acceptance, in effect, would permit the article to be
sold on terms not complying with the requirements of this regulation.
SECTION
12. M ISCELLAN EOUS PROVISIONS
(a ) Clerical Errors.—Any failure to comply with this regulation
resulting from a mistake in determining, calculating, or recording
any price, down payment, or extension of credit, or other similar
matter, shall not be construed to be a violation of this regulation
22
REGULATION W
if the Registrant establishes that such failure to comply was the result
of excusable error and was not occasioned by a regular course of
dealing.
( b ) Extension of Credit for Mixed Purposes.—In case an extension
of credit arises partly out of a sale of a listed article and partly out
of another sale, or is partly subject to one section of this regulation
and partly subject to another section, or is partly subject to the regu
lation and partly not subject to the regulation, the amount and terms
of such extension of credit shall be such as would result if the credit
were divided into two or more parts and each part were treated in
good faith as if it stood alone.
(c) Calculating Maximum Maturity of Instalment Contract.—In
calculating the maximum maturity of an instalment sale or instalment
loan, a Registrant may, at his option, use any date not more than 15
days subsequent to the actual date of the sale or loan.
( d ) “ Lay-away” Plans.— With respect to any extension of credit
involving a b o n a fid e “ lay-away” plan, or other similar plan by which
a purchaser makes one or more payments on an article before receiv
ing delivery thereof, the Registrant may, for the purposes of this regu
lation, treat the extension of credit as not having been made until the
date of the delivery of the article to the purchaser.
(e ) Contracts and Obligations Outstanding on September 1, 1941.—
Nothing in this regulation shall prevent the performance of any valid
contract or obligation entered into prior to September 1, 1941; but,
when any obligation arising out of any extension of credit made prior
to September 1, 1941, has been combined with any extension of credit
made on or after September 1, 1941, or has been the subject of any
renewal or revision made on or after such date, such extension of
credit shall thereafter be treated for the purposes of this regulation
as having been made on the date of such consolidation, renewal or
revision.
(/) Transactions Subjected to Regulation by Amendment.—When
ever this regulation is amended to add any article to the list of arti
cles specified in section 13(a) or so as to apply to any additional class
of transactions, the amendment shall not prevent the perform
ance of any valid contract made prior to the effective date of
the amendment; but any renewal, revision or consolidation of any
obligation growing out of an extension of credit covering such newly
added article or class of transactions shall be subject to the applicable
requirements of this regulation, and, for the purposes of the applicable
provisions regarding renewals, revisions and consolidations, the terms
of repayment “permitted in the first instance” for such an obligation
REGULATION W
23
shall be deemed to be those applicable to such an extension of credit
under such amendment.
( g ) Payments Arising out of Loans on Pledged Obligations,—
With respect to any loan on the security of an obligation which arises
out of an extension of credit subject to this regulation, the prohibitions
of this regulation shall be deemed to apply only to payments arising
out of the obligation rather than to payments arising out of the loan.
( h ) Preservation of Records.—Every Registrant shall preserve,
for the life of the obligation to which they relate, such books of ac
count, records, and other papers (including any statements required
by or obtained pursuant to this regulation) as are relevant to estab
lishing whether or not an extension of credit within the scope of this
regulation was in conformity with the requirements thereof, provided,
however, that the Statement of the Borrower obtained pursuant to
section 6(d) or 7(d) shall be preserved for the life of the obligation
to which it relates or for one year, whichever period is longer, and
provided further that the Registrant may preserve photographic
reproductions in lieu of such books of account, records or papers.
( i ) Inspections and Production of Records.—For the purpose of
determining whether or not there has been compliance with the re
quirements of this regulation, every person required to be licensed
under section 3 shall permit the Board or any Federal Reserve Bank,
by its duly authorized representatives, to make such inspections of
his business operations as the Board or Federal Reserve Bank may
deem necessary or appropriate, including inspections of books of
account, contracts, letters or other relevant papers wherever located,
and, for such purpose, shall furnish such reports as the Board or the
Federal Reserve Bank may require. When ordered to do so by the
Board, every such person shall furnish, under oath or otherwise, such
information relative to any transaction within the scope of the Execu
tive Order as the Board may deem necessary or appropriate for such
purpose, including the production of books of account, contracts,
letters or other papers in the custody or control of such person.
(;) Transactions Outside United States.—Nothing in this regula
tion shall apply with respect to any extension of credit made in Alaska,
the Panama Canal Zone, or any territory or possession outside the
continental United States.
( h ) Right of Registrant to Impose Stricter Requirements.—Any
Registrant has the right to refuse to extend credit, or to extend less
credit than the amount permitted by this regulation, or to require that
repayment be made within a shorter period than the maximum per
mitted by this regulation.
(/) Sets and Groups of Articles.—For the purposes of this regula
24
REGULATION W
tion, the word “ article” shall be deemed to include any set, group or
assembly commonly considered, sold or used as a single unit, if the
component parts thereof are sold or delivered at substantially the
same time.
( m ) “ Cycle Billing.”—The provisions of the following paragraph
shall be applicable, instead of the provisions of the opening paragraph
of section 5(c), to any Registrant who (1) on May 6, 1942, was using
a system of recording and billing his charge accounts whereby such
accounts were divided into several groups and a different monthly
closing date and monthly billing period was used for each such group,
and (2) has received from the Federal Reserve Bank of his district a
notification which is still in force stating that the Federal Reserve
Bank is satisfied (A) that such billing system makes it impracticable
for him to operate under section 5(c) and (B) that it would be im
practicable for him, in view of orders of the War Production Board
restricting deliveries of office machinery, to change his system over
to one that uses the calendar month as the billing period. Such
provisions shall be applicable also to any Registrant who shall have
established such a system after having received from the Federal
Reserve Bank of his district a notification which is still in force stating
that the Federal Reserve Bank is satisfied (1) that the system is
intended to effectuate operating economies with respect to manpower
or office machinery and (2) that its adoption is not for the purpose
of circumventing this regulation.
A charge account maintained by such Registrant shall be deemed to
be in default if any article (whether listed or unlisted) for which credit
was extended in such account has not been paid for in full on or before
the 40th day following the last day of the applicable monthly billing
period during which such article wras sold, except as provided in the
three numbered paragraphs in section 5(c).
With respect to any article sold in such a charge account, the
maximum maturity shall be the period provided in the preceding para
graph instead of that provided in section 5(a).
(n) Mail Orders.—An instalment sale shall not be deemed to be
in violation of section 4 ( a ) if the sale is made upon the receipt of a
mail order for ono or more articles and the cash deposit received with
the order fails by less than $1.00 to equal the sum of the down pay
ments required by this regulation for all of the articles included
in the order.
REGULATION W
SECTION 13. LISTED ARTICLES, DOWN P A Y M E N T S AND M A X IM U M
25
CREDIT
VALUES
(a)
Listed Articles.— The following are the articles which are “ listed
articles” within the meaning of this regulation:
Group A — One-third down and 12 months’ maximum maturity:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
Air conditioners, room unit.
Air conditioning systems, home.
Aircraft (including gliders).
Attic ventilating fans.
Automobile batteries and accessories.
Automobile tires and inner tubes, for passenger automobiles.
Bedding, blankets, curtains, draperies, and household linens and towels.
Bicycles.
Binoculars, field glasses, opera glasses, and hand telescopes.
Boats, and inboard and outboard motors designed for use therewith, other
than boats or motors designed specifically for commercial use.
Clocks, electric or other, designed for household or personal use.
Cooking stoves and ranges, designed for household use.
Dishwashers, electric, designed for household use.
Electric appliances, not elsewhere listed, designed for household or personal
use.
Floor coverings (including fabric and linoleum type rugs, carpets, mats, and
other floor covering materials, whether or not designed to be affixed to
the floor).
Furnaces and heating units for furnaces, household (including oil burners,
gas conversion burners, and stokers).
Heating stoves and space heaters, designed for household use.
Ironers designed for household use.
Jewelry (including precious stones and costume jewelry).
Jjamps designed for household use.
Lawn mowers, edgers. and trimmers (whether or not power-driven).
Lighting fixtures designed for household use.
Luggage, purses, handbags, toilet cases, and umbrellas.
Motion picture cameras, projectors, and lenses, designed for film gauges less
than 35 mm.; still cameras, projectors, lenses and shutters, and enlargers.
Musical instruments not elsewhere listed.
Organs, household electric.
Plumbing and sanitary fixtures designed for household use.
Portable lights, and portable or stationary flood-lighting equipment, de
signed for household use.
Radio receiving sets, phonographs, or combinations.
Refrigerators, mechanical, of less than 12 cubic feet rated capacity.
Sewing machines designed for household use.
Silverware (including flatware and hollow ware, whether solid or plated).
Sports’, athletic, outing, and games’ equipment.
Suction cleaners and mechanical carpet sweepers, designed for household
use.
Tableware and kitchen ware, equipment, and utensils, designed for house
hold use (including pottery, porcelain, chinaware, glassware, and cutlery).
Washing machines designed for household use.
Watches.
Water heaters designed for household use.
Water pumps designed for household use.
Wearing apparel and furs, non-military, (including footwear, headwear, and
haberdashery).
Yard goods designed for making garments or for making articles of house
hold use.
Group B—20 per cent down and 12 months’ maximum maturity:
1. Furniture, household (including ice refrigerators, bed springs, mattresses, and
materials and services employed in reupholstering).
2. Pianos.
26
REGULATION W
Group C— 12 months’ maximum m aturity:
1. Materials and services (other than articles, whether or not designed for
household use, which are of kinds elsewhere listed) in connection with
repairs, alterations, or improvements upon urban, suburban or rural real
property in connection with existing structures (other than a structure,
or a distinct part thereof, which, as so repaired, altered or improved, is
designed exclusively for
use), provided the deferred bal
ance does not exceed $1,500.
uon-residential
Group D —Maximum maturity 15 m onths; for down payment requirement see
section 13(c):
1. Autom obiles (passenger cars designed for the purpose of transporting less
than 10 passengers, including taxicabs).
2. M otorcycles (tw o- or three-wheel motor vehicles, including motor bicycles).
( b ) Trade-in.— If any article is traded in by the purchaser on an
article listed in
Group A,
the cash down payment shall be one-third
of the net price of the article after deducting from the cash price the
amount allowed for the trade-in, and such cash down payment shall
be obtained in addition to the trade-in.
in
Group B,
In the case of an article listed
the cash down payment shall be one-fifth of such net price.
In the case of automobiles and other articles listed in
Group D,
the
down payment required by the regulation may be made in the form of
cash or in the form of a trade-in, or both.
(c) Down Payment on Automobiles and Motorcycles.— For a new
automobile or a new or used motorcycle, the down payment (which
may be in cash or in the form of a trade-in or in both forms) shall be
one-third of the cash price.
For a used automobile the down payment (which may be in cash or
in the form of a trade-in or in both forms) shall be:
(1) One-third of the cash price if the cash price is equal to or
lower than the “ appraisal guide value” ; or
(2) The cash price minus two-thirds of the “ appraisal guide
value” if the cash price is higher than the “ appraisal guide value.”
“ Appraisal guide value” means the estimated average retail value
as stated in such edition of any regularly published automobile
appraisal guide as the Board may designate for this purpose for use
in the territory in which such used automobile is sold, p lu s any appli
cable sales taxes. Information as to the guide or guides designated
for any given territory may be obtained from any Federal Reserve
Bank or branch.
( d ) Down Payment Where Price is Fixed by Federal Authorities.—■
In the case of any article for which the Federal price authorities have
prescribed a maximum retail price, the amount of credit extended pur
suant to the provisions of section 4 shall in no event exceed the amount
which would have been permitted if the article had been sold at the
maximum retail price.
( e ) Maximum Amount of Loan.— A loan to purchase an article
REGULATION W
27
listed in G r o u p A in connection with which the seller has accepted a
trade-in shall not exceed two-thirds of the net price of the listed
article after deducting from the cash price the amount allowed for
the trade-in, and, in the case of an article listed in G ro u p B , the loan
shall not exceed four-fifths of such net price.
A loan to purchase a used automobile shall not exceed two-thirds
of the cash price or two-thirds of the “ appraisal guide value” of the
automobile, whichever is lower.
SECTION
14. ENFORCEABILITY OF CONTRACTS
Except as may subsequently be otherwise provided, all provisions
of this regulation are designated, pursuant to section 2(d) of the
Executive Order, as being “ for administrative purposes” within the
meaning of said section 2 (d ), which provides that noncompliance with
provisions of the regulation so designated shall not affect the right to
enforce contracts.
LIST OF F ED E R AL RESERVE B A N K S A N D BR AN CH ES
Federal Reserve Bank of
Address
BOSTON
30 Pearl Street. Boston 6, Massachusetts
NEW YORK
Buffalo Branch
33 Liberty Street. New York 7, New York
270-276 Main Street, Buffalo 5, New York
PHILADELPHIA
925 Chestnut Street, Philadelphia 1, Pennsylvania
CLEVELAND
East 6th Street and Superior Avenue, Cleveland 1,
Ohio
4th and Race Streets, Cincinnati 1, Ohio
717 Grant Street, Pittsburgh 19, Pennsylvania
Cincinnati Branch
Pittsburgh Branch
RICHMOND
Baltimore Branch
Charlotte Branch
9th and Franklin Streets, Richmond 13, Virginia
Calvert and Lexington Streets, Baltimore 3, Maryland
South Tryon and 2nd Streets, Charlotte 1, North
Carolina
ATLANTA
Birmingham Branch
104 Marietta Street. Atlanta 3, Georgia
18th Street and 5th Avenue, North, Birmingham 2,
Alabama
Church and Hogan Streets, Jacksonville 1, Florida
228 3rd Avenue, North, Nashville 3, Tennessee
Carondelet and Common Streets, New Orleans 11,
Louisiana
Jacksonville Branch
Nashville Branch
New Orleans Branch
CHICAGO
Detroit Branch
230 South LaSalle Street, Chicago 90, Illinois
160 Fort Street, West, Detroit 31, Michigan
ST. LOUIS
Little Rock Branch
Louisville Branch
Memphis Branch
411
121
5th
3rd
MINNEAPOLIS
Helena Branch
73 South 5th Street, Minneapolis 2, Minnesota
Park Avenue and Lawrence Street, Helena, Montana
KANSAS CITY
10th Street and Grand Avenue, Kansas City 18, Mis
souri
17th and Arapahoe, Denver 17, Colorado
226 West 3rd Street, Oklahoma City 1, Oklahoma
1701-5 Dodge Street, Omaha 2, Nebraska
Denver Branch
Oklahoma City Branch
Omaha Branch
Locust Street, St. Louis 2, Missouri
West 3rd Street, Little Rock, Arkansas
and Market Streets, Louisville 1, Kentucky
and Jefferson Streets, Memphis 1, Tennessee
DALLAS
El Paso Branch
Houston Branch
San Antonio Branch
Wood and Akard Streets, Dallas 13, Texas
351 Myrtle Avenue, El Paso, Texas
1301 Texas Avenue, Houston 1, Texas
Navarro and Villita Streets, San Antonio 6, Texas
SAN FRANCISCO
Sacramento and Sansome Streets, San Francisco 20,
California
409 West Olympic Boulevard, Los Angeles 54, Cali
fornia
6th and Oak Streets, Portland 8, Oregon
70 East South Temple Street, Salt Lake City 9, Utah
2nd Avenue and Spring Street, Seattle 14, Washington
Los Angeles Branch
Portland Branch
Salt Lake City Branch
Seattle Branch
@FedFRASER