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F e d e r a l R e s e r v e Ba n k o f D a l l a s DALLAS, TEXAS 75222 Circular No. 69-269 October 31, 1969 SUPPLEMENT TO REGULATION V To All Banking Institutions and Others Concerned in the Eleventh Federal Reserve District: Effective October 27, 1969> "the Board of Governors of the Federal Reserve System has amended Section 7(a) of its Supplement to Regulation V, which pertains to the maximum rate of interest on Loan Guarantees for Defense Production. A copy of the amendment is enclosed for insertion in the ring binder containing the Regulations of the Board of Governors and the Bulletins of this Bank. Yours very truly, P. E. Coldwell President Enclosure (l) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) SU P P L E M E N T T O R E G U L A T IO N V Section 7 — Maximum Rates of Interest, Guarantee Fees, and Commitment Fees I ssued by t h e B oard of Governors of t h e F ederal R eserve S ys t e m E ffe c tiv e O ctober 2 7 ,1 9 6 9 Pursuant to th e provisions o f th e D efen se Production A ct o f 1950 and E xecu tive Order No. 10480, dated A u gu st 14, 1953, as amended, th e Board of Governors o f th e Federal R eserve S ystem hereby prescribes th e m axim um rate o f interest, guarantee fees, and com m itm ent fe e s w hich m ay be charged w ith respect to guaranteed loans executed through th e agency of any Federal R eserve Bank: (a ) M aximum rate o f interest. — The m axim um in terest rate charged a borrower by a financing institution w ith respect to a guaranteed loan shall not exceed 7 Va per cent per annum, except th at the agency guaranteeing a particular loan m ay from tim e to tim e prescribe a higher rate if it determ ines th e loan to be n ecessary in financing an essential defense production contract. (b ) Guarantee fees. — The schedule o f fees w ith respect to guaranteed loans is as fo llo w s: P e r cen t o f loan g u a ra n teed G u arantee F ee (P er cent of interest payable by borrower on guaranteed portion o f loan) 70 or less 75 80 85 90 95 Over 95 10 15 20 25 30 35 4 0 -5 0 In an y case in w hich the rate o f interest on the loan is in excess o f 6 per cent, the guarantee fee shall be computed as though the in terest rate w ere 6 per cent. (c ) Comm itment fees. — In any case in w hich a com m itm ent fee is charged a borrower w ith respect to a guaranteed loan, such fee shall not exceed *4 o f 1 per cent per annum. In any such case, the financing institution w ill pay to the guaranteeing agency a percentage o f such com m itm ent fee, based on the guar anteed portion o f th e credit, equal to the sam e percentage o f the in terest payable on the loan which is required to be paid by the financing institution to the guarantor as a guarantee fee.
