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F ederal reserve Ba n k OF DALLAS Dallas, Texas, August 24, 1948 CONSUMER INSTALMENT CREDIT REGULATION W To the Registrant Addressed and Others Concerned: There is enclosed a copy of Regulation W covering Consumer Instalment Credit, which becomes effective September 20, 1948. It will be observed from Section 2 o f the Regulation that per sons engaged in certain classes o f business, including the making o f instalment sales or instalment loans, are expected, within a sixty-day period, to file a Registration Statement with the appro priate Federal Reserve Bank or branch. Such a statement shall be filed regardless o f whether the Registrant had filed one under Regulation W as effective prior to November 1, 1947. Registration Statement forms will be forwarded to all persons and firms whose names were included in the Regulation W mail ing list o f this bank as o f November 1, 1947, just as soon as the forms are available for distribution. Upon request a copy of Regu lation W and Registration Statement forms will be forwarded to any person or firm which has commenced business since Novem ber 1, 1947. This bank or its branches in El Paso, Houston, and San Antonio will be glad to furnish any further information which may be desired concerning the Regulation. Yours very truly, R. R. GILBERT President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) IN Q U IR IES R EG AR D IN G TH IS R E G U L A T IO N inquiry relating to this regulation should be addressed to the Federal Reserve Bank or Federal Reserve branch bank of the district in which the inquiry arises. REGULATION W CONSUM ER IN S T A L M E N T C R E D IT CONTENTS Pago S e c . 1. S c o p e a n d A p p l ic a t io n o f R e g u l a t io n . 3 R e g i s t r a t i o n ................................................. 3 S e c . 3. I n s t a l m e n t S a l e s : G e n e r a l R u l e s ................................................................. 4 S e c . 2. G e n e r a l R e q u ir e m e n t s (а) (б) (a) (b) (c) and General requirements Registration Down payment and maturity Amounts and intervals of instalments Statement of transaction S e c . 4. I n s t a l m e n t L o a n s : G e n e r a l R u l e s ................................................................ (a) (bj (c) (d) (e) S e c . 5. R e n e w a l s , R e v i s io n s , a n d A d d i t i o n s ............................................................ (a) (b) (e) (e) (j) (g) (b) (*) S upplement 10 Business or agricultural loans , Credit to dealers and certain salesmen Credit to governmental agencies, religious institutions, etc. Credits under government rehabilitation and readjustment programs Loans to pay fire and casualty insurance premiums Credit for purchasing securities Real estate and home improvement loans Loans to meet medical expenses, etc. Disaster credits S e c . 8. M is c e l l a n e o u s P r o v is io n s ; D e f i n i t i o n s ...................................................... (a) (b) (c) id) (e) (/) (g) (h) 7 Special payment schedules for seasonal incomes Calculating maximum maturity of contract Record of instalment sale Extension of credit for mixed purposes “ Lay-away” plans Mail orders Delivery in anticipation of instalment sale Sets and groups of articles Evasive side agreements Side loan to make down payment Purchase of article in lieu of trade-in Misuse of coupon plans S e c . 7. E x e m p t C r e d i t s ............................................................................................................ (o) (b) (c) (d) 6 General requirements Statement of changed conditions Bona fide collection effort; Servicemen’s pre-induction debt S e c . 6. C e r t a in T e c h n ic a l P r o v is io n s ........................................................................... (a) (b) (c) (d) (e) (/) (g) (it) (i) (j) (k) (l) 4 Instalment loans to purchase listed articles Unclassified instalment loans Amounts and intervals of instalments; Record Statement of the borrower Loans to make down payments prohibited 11 Preservation of records; Inspections Suspension of license Enforceability of contracts Clerical > 'rs Non-compi ce due to facts outside Registrant’s knowledge Transactions 'tside United States Right of Regis i nt to impose stricter requirements Definitions 15 R E G U L A T IO N W Effective September 20, 1948 * CONSUMER INSTALMENT CREDIT S E C T IO N 1. SCO PE A N D A P P L IC A T IO N OF R E G U L A T IO N This regulation is issued by the Board of Governors of the Federal Reserve System (hereinafter called the “Board” ) under authority of section 5(6) of the Act of October 6, 1917, as amended, Executive Order No. 8843, dated August 9, 1941 (hereinafter called the “ Executive Order” ), and Public Law 905, approved August 16, 1948. The regulation applies, in general, to any person who is engaged in the business of making extensions of instalment credit in amounts of $5,000 or less, or discounting or purchasing obligations arising out of such extensions of credit. It applies whether the person is a bank, loan company, or finance company, or a person who is so engaged in connec tion with any other business, such as by making such extensions of credit as a dealer, retailer, or other person in connection with the sell ing of consumers’ durable goods. S E C T IO N 2 . G E N E R A L R E Q U IR E M E N T S A N D R E G IS T R A T IO N (a) General Requirements.—Each person engaged in the business of making instalment sales*1 or instalment loans,2 or engaged in the business of lending on the security of or discounting or purchasing obligations arising out of such extensions of credit, is referred to in this regulation as a “ Registrant” ; and no Registrant 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 discounted or purchased by him, except on the following conditions: (1) He must have a license, and each Registrant is hereby granted such a license, but such license of a Registrant may be * This regulation shall apply to extensions o f credit made, renewed, revised or consolidated on or after the effective date. 1 It is to be noted that “ instalment sale” is defined to include only instalment credit arising out o f the sale of an article listed in the Supplement, hereinafter called a “ listed article.” 2 Both “ instalment sale” and “ instalment loan” are defined to exclude credits in a principal amount exceeding $5,000. 3 4 REGULATION W suspended in the manner and on the grounds stated in section 8 ( b ) ; and (2) The extension of credit made, renewed, revised or con solidated by him, or giving rise to the obligation discounted or purchased by him or acquired by him as collateral, must comply with the applicable requirements of this regulation. (b) Registration.—Within 60 days after the effective date of this regulation, or 60 days after he becomes subject to section 2(a), which ever is later, each Registrant shall file, with the Federal Reserve Bank or'any branch thereof in the district in which the main office of the Registrant is located, a registration statement on a form obtain able from any Federal Reserve Bank or branch. Such statement shall be filed regardless of whether or not the Registrant had filed such a statement under Regulation W as in effect prior to November 1, 1947. S E C T IO N 3 . IN S T A L M E N T SALES! G E N ERAL RULES Except as otherwise permitted by this regulation, each instalment sale shall comply with the following requirements: (a) Down Payment and Maturity.—There shall be a down pay ment not less than that specified for the listed article in the Supple ment, such down payment to be calculated as therein specified; and the maturity shall not exceed that specified for the listed article in the Supplement. (b) Amounts and Intervals of Instalments.—Except as permitted by section 6(a) for seasonal incomes, the time balance shall be payable in instalments which shall be (1) substantially equal in amount or so arranged that no' instalment is substantially greater than any pre ceding instalment, (2) payable at approximately equal intervals not exceeding one month, and (3) not less than $5.00 per month or $1.25 per week on the aggregate instalment indebtedness of one debtor to the same creditor. (c) Statement of Transaction.— The instalment sale shall be evidenced by a written instrument or record which shall set forth the information specified in section 6 (c). S E C T IO N 4. IN S T A L M E N T LOAN S! GEN ERAL RULES Except as otherwise permitted by this regulation, each instalment loan shall comply with the following requirements: REGULATION W 5 (а) Instalment Loans to Purchase Listed Articles.—If the Regis trant knows or has reason to know that the proceeds of an instalment loan are to be used to purchase any listed article: (11 The principal amount lent (excluding any interest or finance charges and the cost of any insurance) shall not exceed the maximum loan value specified for the article in the Supple ment, such loan value to be calculated as therein specified; and (2) The maturity shall not exceed the maximum maturity speci fied for the listed article in the Supplement. (б) Unclassified Instalment Loans.— In the case of an instalment loan which is not subject to section 4 (aI, the maximum maturity shall not exceed the maximum maturity specified therefor in the Supple ment. (c) Amounts and Intervals of Instalments; Record.— Whether subject to section 4(a) or section 4(b), the instalment loan, except as permitted by section 6(a) for seasonal incomes, shall be payable in instalments which shall be (1) substantially equal in amount or so arranged that no instalment is substantially greater in amount than any preceding instalment, (2) payable at approximately equal intervals not exceeding one month, and (3) not less than $5.00 per month or $1.25 per week on the aggregate instalment indebtedness of one debtor to the same creditor. It shall be evidenced by a written instrument or record which shall set forth the terms of payment. (d) Statement of the Borrower.— No Registrant shall make any instalment loan subject to section 4(a) or 4(b) 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, and if any of the proceeds of the loan are to be used for the latter purpose such Statement shall identify such listed article and shall state the cash price thereof and the value of any trade-in. If a Regis trant 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. (e) Loans to Make Down Payments Prohibited.— A Registrant shall not make any instalment loan if he knows or has reason to know that any part of the proceeds thereof is to be used to make a down pay ment on the purchase price of any listed article. 6 REGULATION W S E C T IO N 5. 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 (a) General Requirements.— In the case of an instalment sale or instalment loan which results from a renewal or revision of any such credit already outstanding, or which results from the combination of any such outstanding credit with an additional extension of instalment credit, the renewed, revised or consolidated obligation shall (regard less of when the outstanding credit originated) comply with all the requirements of this regulation as if it were a new extension of credit except that: (1) The requirements as to Statement of Borrower and down payment or maximum loan value, if any, shall not apply to the outstanding credit already held by the Registrant; and (2) The renewed, revised or consolidated obligation may, in so far as the maturity and instalment requirements are concerned, be treated as if it were a new credit with the maximum maturity calculated from the date of the renewal, revision or consolidation. The payments on such renewed, revised, or consolidated obligation 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. (b) Statement of Changed Conditions.— Notwithstanding any other provision of this regulation, if a Registrant accepts in good faith a Statement of Changed Conditions as provided in the following para graph, an extension of instalment credit that refinances any outstand ing obligation (whether or not such obligation is held by the Registrant or is itself payable in instalments) may have a maturity not exceeding that specified in the Supplement for refinancing pursuant to such Statements, but such maturity shall be applicable only to the credit refinanced. The payments on the credit refinanced need not be as large as $5.00 per month or $1.25 per week. The requirements of a Statement of Changed Conditions will be complied with only if the Registrant accepts in good faith a written statement signed by the obligor that the contemplated refinancing is necessary in order to avoid undue hardship upon the obligor or his dependents resulting from contingencies that wer.e 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 the principal facts and circumstances ( 1) with respect to the original extension of credit and (2 1 with respect to such contingencies, and specifically states in addition that the contemplated refinancing is not pursuant 7 REGULATION \V to a preconceived plan or an intention to evade or circumvent the requirements of this regulation. (c) Bona Fide Collection Effort; Servicemen’s Pre-induction Debt.— 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) for the Registrant’s own protection in connection with any obligation which is in default and is the subject of bona fide collection effort by the Registrant, or (2 ) 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. S E C T IO N 6. C E R T A IN T E C H N IC A L P R O V IS IO N S (а) Special Payment Schedules for Seasonal Incomes.— If the income received by an obligor from the main sources of his income customarily fluctuates materially from month to month or from sea son to season, the payment schedule may be adapted, within the applicable maximum maturity, to such customary flow of income, provided the obligation complies with one or the other of the following requirements: ( 1) at least half of the credit is to be repaid within the first half of the applicable maximum maturity; or (2) payments are reduced or omitted in not more than 4 months of any calendar year but are otherwise in equal monthly amounts. In all such cases, a statement of the facts relied upon shall be preserved in the Registrant’s files for the life of the obligation. (б ) Calculating Maximum Maturity of 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. (c) Record of Instalment Sale.— The instrument or record evi dencing an instalment sale pursuant to section 3(c) 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 assigned thereto in good faith; (4) The amount of any insurance premium for which credit is extended and of any finance charges or interest by way of dis 8 REGULATION W count included in the principal amount of the obligation, or the sum of these amounts; (5) The time balance owed by the purchaser, which is the sum of items (2) and (4) minus item (3 ); and (6) The terms of payment. The instrument or record need not include a description of the article if it is purchased by means of a coupon book or similar medium of instalment credit upon which there has been made a cash down pay ment at least as great as the highest down payment required by this regulation on any article sold by the Registrant. The instrument or record need not include the information called for by items (2 ) and (4) if the Registrant is one who quotes to the public a time price for the article which includes the finance charge if any, provided he sets forth such time price in such instrument or record, and provided he obtains a cash down payment which is at least as large as would be required if the percentage specified for the article in the Supple ment were applicable to the time price. id) Extension of Credit for Mixed Purposes.—In case an ex tension of credit is partly subject to one section of this regulation and partly subject to another section, the amount and terms of such exten sion of credit shall be such as would result if the credit were divided into two or more parts and each part were treated as if it stood alone. In case an extension of credit is partly subject to this regulation 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 and the part subject to the regulation were treated according to the applicable provisions of the regulation; the part not subject to the regulation may be treated as if the regulation did not exist. (e) “ Lay-away” Plans.—With respect to any extension of credit involving a bona fide “ 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. (/) Mail Orders.— An instalment sale shall not be deemed to be in violation of the down payment requirement of section 3( «i if the sale is made upon the receipt of a mail order for one or more articles and the cash deposit received with the order fails by less than $1.00 to equal the sum of the down payments required by this regulation for all of the articles included in the order. REGULATION W 9 (g) Delivery in Anticipation of Instalment Sale.— 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” I, the Registrant shall recpiire, at or before the time of such delivery, a deposit equal to the down payment that would be required on such an instalment sale. (h) Sets and Croups of Articles.— In determining whether an article is a “ listed article” , the word “ article” shall be deemed to in clude 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. (fI 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 (II by which the obligation is to be renewed or revised on terms which would permit final payment to be deferred beyond the date permitted by this regulation for such credit at its inception, or (21 by which the obligor is to be enabled to make repayment on conditions inconsistent in any other respect with those required by this regulation, or (3 1 by which there is to be any evasion or circumvention, or any concealment of any evasion or circumvention, of any requirement of this regulation. {']) Side Loan to Make Down Payment.— A Registrant shall not make an extension of instalment 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 of any kind 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 of instalment credit 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 state ment shall be deemed to be correct for the purposes of the Registrant. (k) 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 the purposes of this regulation.(l) (l) Misuse of Coupon Plans.— No coupon, ticket or similar medium of credit, whether paid for in instalments or otherwise, shall be ac cepted 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. 10 REGULATION W S E C T IO N 7. E X E M P T CREDITS This regulation shall not apply to any of the following: (a) Business or Agricultural Loans.— Any loan for business pur poses to a business enterprise or for agricultural purposes to a person engaged in agriculture, provided the loan is not for the purpose of purchasing a listed article. (b) Credit to Dealers and Certain Salesmen.— Any extension of credit to a wholesaler or retailer to finance the purchase of any article for resale, or any extension of credit which is made to a bona fide salesman of automobiles in order to finance the purchase of a new automobile to be used by him principally as a demonstrator. (c) Credit to Governmental Agencies, Religious Institutions, etc.— 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, education, charitable, or eleemosy nary institution. (d) Credits LTnder Government Rehabilitation and Readjust ment Programs.— Any extension of credit (11 made by the Land Bank Commissioner on behalf of the Federal Farm Mortgage Corpora tion or by any Federal land bank and found, pursuant to regulations issued by the Commissioner, to be necessary to maintain or increase production of essential agricultural commodities, (2 ) made or insured by the Farmers’ Home Administration, (3) made in accordance with the regulations of the Secretary of the Interior for the economic de velopment or rehabilitation of Indians, (4) made under section 4(a) (4) of the Reconstruction Finance Corporation Act, as amended, because of floods or other catastrophes, or (5) made, guaranteed or insured in whole or in part by the Administrator of Veterans’ Affairs pursuant to the provisions of Title III of the Servicemen’s Readjustment Act of 1944, or by any State agency pursuant to similar State legislation. (e) Loans to Pay Fire and Casualty Insurance Premiums.— Any loan to finance a premium in excess qf one year on a fire or casualty insurance policy, if the loan is fully secured by the unearned portion of such premium. (/I Credit for Purchasing Securities.— Any extension of credit which is subject to the Board’s regulations under the Securities Ex change Act of 1934 or which is otherwise for the purpose of purchasing or carrying stocks, bonds, or other investment securities. REGULATION W 11 (g) Real Estate and Home Improvement Loans.— Any extension of credit which is for the purpose of financing or refinancing (11 the construction or purchase of an entire residential building or other entire structure or (2) repairs, alterations, or improvements upon urban, suburban or rural real property in connection with existing structures, except to the extent that such repairs, alterations, or im provements incorporate any listed article. (h) Loans to Meet Medical Expenses, etc.— Any loan as to which the Registrant accepts in good faith a written statement signed by the borrower certifying that the proceeds arc to be used for bona fide educational, medical, hospital, dental, or funeral expenses, or to pay debts incurred for such expenses, and that such proceeds (unless they are to be used exclusively for educational expenses) are to be paid over in amounts specified in such statement to persons whose names, addresses, and occupations are stated therein. (i) Disaster Credits.— Any extension of credit to finance the repair or replacement of 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 occurred finds has created an emergency affect ing a substantial number of the inhabitants of the stricken area, pro vided such extension is made prior to the end of the sixth calendar month following the month in which the disaster occurred and a state ment describing the damage or loss is preserved in the Registrant’s files. S E C T IO N 8. M IS C E L L A N E O U S P R O V IS IO N S ; D E F IN IT IO N S (a) Preservation of Records; Inspections.— Every Registrant shall preserve, for the life of the obligation to which they relate, such books of account, records, and other papers (including any statements required by or obtained pursuant to this regulation) as are relevant to establishing whether or not an extension of credit within the scope of this regulation was in conformity with the requirements thereof, provided, however, that the Registrant may preserve photographic reproductions in lieu of such books of account, records or papers. For the purpose of determining whether or not there has been com pliance with the requirements of this regulation, every Registrant 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 appro priate, including inspections of books of account, contracts, letters or other relevant papers wherever located, and, for such purpose, shall 12 REGULATION \V furnish such reports as the Board or the Federal Reserve Bank may require. When ordered to do so by the Board, every Registrant shall furnish, under oath or otherwise, such information relative to any transaction within the scope of the authority cited in section 1 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. (hi 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, because of any willful or negligent failure to comply with any provision of this regulation or any re quirement of the Board pursuant thereto. A license which is suspended for a specified period wdll again be come effective upon the expiration of such period. A license which is suspended 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 nob be otherwise incompatible with the public interest. (c) 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 admin istrative 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. (d I Clerical Errors.— Any failure to comply with this regulation resulting from a mistake in determining, calculating, or recording any price, dowm payment, or extension of credit, or other similar matter, shall not be construed to be a violation of this regulation if the Regis trant establishes that such failure to comply was the result of excusable error and was not occasioned by a regular course of dealing. I'e) Non-Compliance Due to Facta Outside Registrant’s Knowl edge.— The prohibitions of this regulation shall not apply to a Regis trant with respect to any failure to comply with this regulation in connection with ( 1) an extension of credit made by him if, at the time •'* In addition, the authority cited in .section 1 authorizes the Board to institute court proceedings to restrain violations and to compel compliance with the regulation or anv order o f the Board made in pursuance thereof. Furthermore, any Registrant who willfully violates or knowingly par ticipates in a violation of this regulation is subject to the penalties prescribed in section 5(6) o f the Act of October 6, 1917, as amended, which reads in part as follows; "W hoever willfully violates any o f the provisions of this subdivision or o f anv license, order, rule, or regulation issued there under. shall, upon conviction, he fined not more than $10,000, or, if a natural person, may he im prisoned for not more titan ten years, or b oth ; and any officer, director, or agent o f any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both .” REGULATION W 13 he made it, he did not know or have reason to know any fact by reason of which such extension failed to comply; (2 ) an obligation purchased, discounted or acquired as collateral by him if, when he purchased or discounted the obligation or acquired it as collateral, the obligation did not show on its face any failure to comply and he did not know any fact by reason of which the extension of credit giving rise to the obligation failed to comply; or (3) an obligation renewed, revised, or consolidated by him if, at the time when he renewed, revised or con solidated it, he did not know or have reason to know any fact by reason of which such renewal, revision or consolidation failed to com ply. With respect to any loan on the security of an obligation w'hich arises out of an extension of credit subject to this regulation, the prohibitions of this regulation shall be deemed to apply only to pay ments arising out of the obligation rather than to payments arising out of the loan. (/) 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. ( 5 ) 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. (h) Definitions.— For the purposes of this regulation, unless the context otherwise requires: (1) “ Person” means an individual, partnership, association, or corporation. (2 ) “Registrant” has the meaning given it in section 2 (a). (3) “Extension of Credit” has the meaning given it in the Executive Order.* (4) “ Instalment Credit” means an extension of credit which the obligor undertakes to repay in two or more scheduled pay ments or as to which the obligor undertakes to make two or more ♦The pertinent part of the Executive Order reads as follows: “ Extension of credit” means any loan or mortgage; any instalment purchase contract, any conditional sales contract, or any sale or contract of sale under which part or all of the price is payable subsequent 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 optioq of becoming the owner thereof or obligates himself to pay as compensation a sum substantially equivalent to or in excess of the value thereof; any contract creating any lien or similar claim or property to be discharged by the payment of money; any purchase, discount, or other acquisition of, or any extension of credit upon the security of, any obligation or claim arising out of any of the foregoing; and any transaction or series of transactions having a similar purpose or effect. 14 REGULATION W scheduled payments or deposits usable to liquidate the credit, or which has a similar purpose or effect, (5) “ Instalment Sale” means an instalment credit in a prin cipal amount of $5,000 or less which is made as principal, agent or broker, by any seller of any consumers’ durable good listed in the Supplement to this regulation (herein called a “ listed article” ) and which arises out of a sale of such listed article. For this purpose, “sale” includes a lease, bailment, or other transaction which is similar in purpose or effect to a sale. ( 6 ) “ Instalment Loan” means an instalment credit, other than an instalment sale, in the form of a loan which is in a principal amount of $5,000 or less; but the definition does not include any loan upon the security of any obligation which arises out of any instalment sale or instalment loan. (7) “ Cash Price ” means the bona fide cash purchase price of an article, including the bona fide cash purchase price of any accessories, any bona fide delivery, installation and service charges (other than interest, finance or insurance charges), and any ap plicable sales taxes. ( 8 ) “ Principal Amount” in the case of an instalment sale means the total amount to be paid under the obligation minus the finance charge, and in the case of an instalment loan means the amount lent exclusive of interest (whether or not such in terest is deducted in advance). REGULATION W 15 SUPPLEMENT TO REGULATION W Effective September 20, 1948 Part 1. Listed Articles, Down Payments, Loan Values.—For the purpose of Regulation W, the following articles, whether new or Used, are “ listed articles”, and the following required down payments and maximum loan values are prescribed (such down payments and loan values to be calculated as specified in Parts 4 and 5 of this Supplement); but no article having a cash price oj less than $50.00 shall be considered a listed article: Group A— 33Y:i per cent minimum down payment, 66-/,\ per cent maximum loan value: I. Automobiles (passenger cars designed for the purpose of trans porting less than 10 passengers, including taxicabs). Group B— 20 per cent minimum down payment, 80 per cent maxi*1 I. 0 9 8 7 6 5 4 3 2 mum loan value: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. II. Cooking stoves and ranges, designed for household use. Dishwashers, mechanical, designed for household use. Ironers designed for household use. Refrigerators, mechanical, of less than 12 cubic feet rated stor age capacity (including food freezers). Washing machines designed for household use. Combination units incorporating any listed article in the fore going classifications of this Group B. Air conditioners, room unit. Radio or television receiving sets, phonographs, or combinations. Sewing machines designed for household use. Suction cleaners designed for household use. Furniture, household, (including ice refrigerators, bed springs, mattresses and lamps) ; and floor coverings, soft surface. Part 2. Maturities.—The maximum maturity for all listed articles and for unclassified instalment loans is 15 months in case the exten sion of credit is in a principal amount of $1,000 or less and 18 months in case the extension of credit is in a principal amount of more than $1,000, except that when such principal amount is more than $1,000 the instalment payments shall not be less than $70 per month. Part 3. Refinancing Pursuant to Statement of Changed Condi tions.—The maximum maturity of any refinancing pursuant to a Statement of Changed Conditions as specified in section 5(b) shall be 20 months. 16 REGULATION W Part 4. Calculation of Down Payments for Automobiles.— The maximum loan value of any automobile shall be the specified per centage of the cash price or of the “ appraisal guide value”, whichever is lower, and the required down payment shall be the difference be tween the cash price and the maximum loan value as so calculated. Such required down payment in the case of an automobile may be obtained in the form of cash, trade-in, or both. “ Appraisal guide value” means the estimated average retail value as stated in the current edition of any regularly published automo bile appraisal guide that the Board designates for this purpose for use in the territory in which such automobile is sold, plus any applica ble sales taxes. Information as to the guide or guides designated for any given territory may be obtained from any Federal Reserve Bank or branch. Part 5. Calculation of Down Payments for Articles in Group B.— If any article is traded in by the purchaser on an article listed in Group B, the required down payment and the maximum loan value shall be the specified percentage of the net price of the article after deducting from the cash price the amount allowed for die trade-in; and such down payment shall be obtained in cash in addition to the trade-in. LIST OF FEDERAL RESERVE BANKS AND BRANCHES Address Federal Reserve Bank of BOSTON 30 Pearl Street, Boston 6, Massachusetts N EW Y O R K Buffalo Branch 33 Liberty Street, New York 7, New York 270-276 Main Street, Buffalo 5, New York PH ILAD ELPH IA 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 CHICAGO Detroit Branch 9th and Franklin Streets, Richmond 13, Virginia Calvert and Lexington Streets, Baltimore 3, Maryland South Tryon and 2nd Streets, Charlotte 1, North Carolina 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 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 M INNEAPOLIS Helena Branch 73 South 5th Street, Minneapolis 2, Minnesota Park Avenue and Lawrence Street, Helena, Montana KANSAS C ITY 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 R IC H M O N D Baltimore Branch Charlotte Branch A TLA N TA Birmingham Branch Jacksonville Branch Nashville Branch New Orleans Branch 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 FEDERAL RESERVE SYSTEM B O U N D A R IE S OF F E D E R A L R E S E R V E D IS T R IC T S AND T H E IR BR ANCH T E R R I T O R I E S rajs'" BOUNDARIES OF FEDERAL RESERVE DISTRICTS ------★ BOUNDARIES OF FEDERAL RESERVE BRANCH TERRITORIES BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM • FEDERAL RESERVE BANK CITIES * FEDERAL RESERVE BRANCH CJTIES OCTOBER t, 1041 bo abp or governors or rue rro t* al reserve bystbH