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FEDERAL RESERVE BANK OF NEW YORK "Circular No. 2 4 2 8 1 May 5, 1942 J CONSUMER CREDIT AMENDMENT NO. 4 TO REGULATION W OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM To all Registrants under Regulation W, and Others Concerned, in the Second Federal Reserve District: In conformity with the President's special message to Congress of April 27, 1942, and under authority of Executive Order No. 8843 of August 9, 1941, the Board of Governors of the Federal Reserve System has adopted, effective May 6,1942, Amendment No. 4 of Regulation W relating to consumer credit. A copy of the regulation in the form in effect May 6, 1942 is enclosed. As amended, the regulation is extended to cover a comprehensive list of durable and semidurable goods for civilian consumption, and contemplates that the volume of outstanding consumer credit, already substantially diminished, will be further contracted in keeping with the Government's purpose to prevent the rapid bidding up of prices. The purpose of this revision is to help make effective the last point in the seven-point program which the President set forth in his special message to Congress of April 27, 1942, as follows: "To keep the cost of living from spiraling upward, we must discourage credit and instalment buying, and encourage the paying off of debts, mortgages, and other obligations; for this promotes savings, retards excessive buying and adds to the amount available to the creditors for the purchase of war bonds." Principal changes made by Amendment No. 4 The principal changes made in the regulation are: 1. The list of consumers' goods to which the regulation applies has been broadened to include automobile batteries and accessories, tires and tubes; bedding; draperies; binoculars; household electric appliances not hitherto listed; used furniture; jewelry; luggage; athletic equipment; table and kitchenware; pottery, glassware; yard goods; and non-military clothing and furs, including shoes, hats and other haberdashery. 2. The maximum permissible maturity of instalment sales has been reduced to twelve months, and the required down payment for all listed articles has been increased to 33^ per cent, except that in the case of furniture and pianos the required down payment has been increased from ten to twenty per cent, and in the case of automobiles the maximum maturity of fifteen months and down payment of one-third are retained. 3. The scope of the regulation has been broadened to make it cover, in addition to instalment sales and instalment loans, (a) Charge-account sales of listed articles.—The regulation provides with respect to charge accounts that unless payment is made by the tenth day of the second calendar month following the purchase, no further credit may be extended to purchase any listed article until the items in default have been paid for in full or have been placed on an instalment basis for payment within six months. No down payments are required on purchases in charge accounts. (b) Single-payment consumer loans.—Such loans of $1500 or less are limited to a maturity of ninety days, and where such a loan is to purchase a listed article costing $15.00 or mere, a down payment is also required. If not paid in ninety days, the loan must be placed on an instalment basis. 4. The revised regulation provides that instalment payments shall not be less than $5.00 per month or $1.25 per week. The exemption from down payment requirements of instalment sales maturing within three months has been repealed. Provisions covering seasonal adjustments and so-called farmer plans are retained in the regulation, together with various additional exceptions, such as real estate loans; security loans subject to Regulations T and U of the Board of Governors; educational, hospital, medical, dental, and funeral expenses; aircraft; defense housing; credit to dealers; fire and casualty insurance premiums; agricultural production loans; business loans; insurance policy loans; and extensions of credit to the Federal Government, to local governments, or to any hospital, school, college, or other educational or charitable institution. Registration requirements The regulation continues to provide that any person who is subject thereto must be licensed. Any person who has already filed a Registration Statement is not required to file another because he is duly licensed by virtue of the original filing. Any person who was not formerly subject to the regulation but becomes subject thereto because of Amendment No. 4 is granted a general license. If such person is required to be licensed solely because he makes charge sales of listed articles or makes single-payment loans, the general license will continue until the Board of Governors shall by public announcement require such person to register. Any other person who now becomes subject to the regulation must file a Registration Statement on or before July 31, 1942, the expiration date of his general license. How to register Registration is accomplished by filling out Form F.R. 563-a and filing it with the Federal Reserve Ban!; of New York provided the Registrant's main office is located in the Second Federal Reserve District, which includes the entire State of New York, Fairfield County, Connecticut, and the counties of Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Passaic, Somerset, Sussex, Union, and Warren, in the State of New Jersey. Only one Registration Statement is required for any one person or corporation, which will cover the main office and all branches, but each subsidiary, if it is a separate corporate entity and is engaged in the business outlined above, is required to file a separate Registration Statement. Instructions for filling in Form F.R. 563-a are given on the back of the form, and these are intended to enable the Registrant to fill in the form quite readily. If in completing the statement, however, any Registrant has questions which are not answered by these instructions, or finds that following the instructions exactly would cause undue expense or inconvenience, the Registrant should take up such questions with the Federal Reserve Bank. Statement of borrower The regulation provides that a person subject thereto may not make a regulated instalment loan or single-payment loan unless he obtains and accepts in good faith a signed statement of the borrower as to the purposes of the loan in form prescribed by the Board of Governors. Since the form of statement (Form F.R. 564) heretofore prescribed, does not provide for information concerning borrowings to repay noninstalment debt, the Board is preparing a new form. In the meantime, however, the Board has prescribed that old Form F.R. 564 shall be used for the present provided question 2 thereof is deleted and the word "instalment*' is deleted from question 3. Even after the new form has been issued a Registrant who has a supply of old forms on hand may continue to use them with such deletions until July 31,1942. Copies of Form F.R. 563-a and additional copies of Regulation "W and this circular will be forwarded to you upon receipt of your request on the enclosed card. AIXAN SPEOUL, President. It will be appreciated if financial institutions will bring this amendment to the attention of persons who they have reason to believe may become subject to the regulation because of the extended scope thereof and the broadening of the list of consumers* goods to which the regulation applies. BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM CONSUMER CREDIT REGULATION As Revised Effective May 6, 1942 INQUIRIES REGARDING THIS REGULATION Any 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. FOREWORD (Not a part of the regulation) Regulation W, issued under authority of the President's Executive Order of August 9, 1941, has been revised, effective May 6, 1942, in compliance with that part of the President's Special Message to Congress on April 27, 1942, which reads: "To keep the cost of living from spiraling upward discourage credit and instalment buying, and encourage ment of debts, mortgages, and other obligations, for this savings, retards excessive buying and adds to the amount to the creditors for the purchase of war bonds." we must the paypromotes available 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 instalment 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. (a) (b) (c) (d) (e) (f) ((/) (h) (i) 0") (k) SEC. , General requirements Genera! license Registration Suspension of license 4. INSTALMENT SALES (a) (b) (c) (d) SEC. Person Extension of credit Instalment credit Sale Instalment sale Charge sale Charge account Instalment loan Single-payment loan Cash price Registrant 5 5 3. GENERAL REQUIREMENTS AND REGISTRATION (a) (b) (c) (d) SEC. Page 1. SCOPE OF REGULATION 2. DEFINITIONS Down payment Maximum maturity Amounts and intervals of instalments Statement of transaction 5. CHARGE ACCOUNTS 5 5 6 6 6 6 6 6 6 6 6 7 7 7 8 8 8 8 9 9 9 9 (a) (b) (c) {d) (e) Maximum maturity 9 Restriction 10 Default 10 Curing defaults 10 Conversion of charge account into instalment credit prior to default 10 (/) "Floor authorizations" 11 SEC. 6. INSTALMENT LOANS (a) (b) (c) (d) SEC. 7. SINGLE-PAYMENT LOANS (a) (6) (c) (d) (e) (/) SEC. Instalment loans to purchase listed articles Instalment loans not to purchase listed articles Additional requirements Statement of the borrower Single-payment loans to purchase listed articles Single-payment loans not to purchase listed articles Renewals and extensions Statement of the borrower Loans payable on demand Credit to retire obligations held elsewhere 8. EXCEPTIONS (a) (b) (c) (rf) (e) (/) {g) (h) (t) (j) (fc) (I) Real estate loans Security loans and credits Educational, hospital, medical, dental, and funeral expenses. Aircraft credits Defense housing Credit to dealers Fire and casualty insurance premiums Disaster loans Agricultural loans Business loans Insurance policy loans Credit to Governmental agencies and religious, educational or charitable institutions 11 11 11 12 12 12 12 13 13 14 14 14 14 14 14 14 15 15 15 15 15 15 16 16 16 CONTENTS Page SEC. 9. SEASONAL ADJUSTMENTS (a) Intervals of payments (b) Farmers and stock raisers (c) Other persons with seasonal -incomes SEC. 10. RENEWALS, REVISIONS, AND ADDITION'S OF INSTALMENT CREDIT. . . (a) (b) (c) (d) Renewals or revisions Additions to outstanding credit held by Registrant Credit to retire instalment obligations held elsewhere Statement of necessity to prevent undue hardship SEC. 11. EVASIVE DEVICES PROHIBITED (a) (b) (c) (d) (e) SEC. 12. Evasive side agreements Loans to make down payments Side loan to make down payment on listed article Purchase of article in lieu of trade-in Coupon plans MISCELLANEOUS PROVISIONS (a) (b) (c) (d) (e) (/) (g) (h) (i) (j) (k) (/) Clerical errors Extension of credit for mixed purposes Calculating maximum maturity of instalment contract "Lay-away" plans Contracts and obligations outstanding on September 1, 1941. Transactions subjected to regulation by amendment Payments arising out of loans on pledged obligations Records and reports Production of records Transactions outside United States Right of Registrant to impose stricter requirements Sets and groups of articles 16 16 16 17 17 17 18 18 19 19 19 19 19 20 20 20 20 20 20 20 20 21 21 21 21 21 21 21 SEC. 13. LISTED ARTICLES, DOWN PAYMENTS AND MAXIMUM CREDIT VALUES. . 22 (a) Listed articles Group A Group B Group C Group D (b) Trade-in (c) Down payment on automobiles and motorcycles (d) Down payment where price is fixed by Federal authorities.. (e) Maximum amount of loan 22 22 23 23 23 23 23 24 24 SEC. 14. ENFORCE ABILITY OF CONTRACTS SEC. 15. EFFECTIVE DATE OF REGULATION 24 24 REGULATION W As revised effective May 6, 1942 CONSUMER CREDIT SECTION I. 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 "Executive 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 engaged 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. DEFINITIONS For the purposes of this regulation, unless the context otherwise requires: (a) "Person" means an individual, partnership, association, or corporation. (b) "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 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 aris1 The Executive Order defines "consumers' durable Rood" as includlne "any (tood. whether new or used, which is durable or semi-durahle and is used or usable for personal, family or household purposes, and anv service connected wilh the acquisition of any such (tood or of any interest therein." Section 13(a) lists the consumers' durable and semi-durable goods within the scope of the regulation. b REGULATION W ing 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 payments 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 instalment 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. (g) "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 upon the security of any obligation which arises out of any instalment sale or instalment loan. (i) "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 (I) a loan made for business purposes to a business enterprise which is not for the purpose of purchasing a listed article, (2) a loan for agricultural purposes to a person engaged in agriculture which is not for the purpose of purchasing a listed article or (3) any loan upon the security of any obligation which arises out of any instalment sale, instalment loan, charge account or single-payment loan. (;') "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 applicable sales taxes. (k) "Registrant" means a person who is licensed pursuant to section 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 discounted 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 connection 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 connection with any obligation which he has purchased or discounted or has accepted as collateral if, at the time he purchased or discounted 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 connection 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 resulted 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 calendar month after the month in which the amendment becomes effective unless such person has registered in the manner provided in section 3(c) before such termination, except that the general license of a person who is required to be licensed solely because he makes charge sales of listed articles or makes single-payment loans shall not terminate 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). 1 It is to be noted that the terra "instalment sale" includes only instalment credit arising out of the sale of listed articles. O 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 statement 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 negligently made in the registration statement; (2) Any willful or negligent failure to comply with any provision 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 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 not be otherwise incompatible with the public interest. SECTION 4. INSTALMENT 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 Group 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 Group C of section 13(a), no down payment is required; and (3) In the case of articles the cash price of which is $6.00 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 applicable provisions of section 13. "In addition, any Reaistrant who willfuHv violates or knowinelv participates in a violation of this reputation 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 (6) Maximum Maturity.—The maturity shall not exceed 12 months, except that, in the case of automobiles and motorcycles as defined in Group 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 instalment is substantially greater in amount than any preceding instalment; 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 attached 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 description identifying such goods and stating the monetary value assigned 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 discount 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 of payment. 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. 10 REGULATION W (b) Restriction.—When a charge account is in default, the Registrant 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 because 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 permitted in accordance with section 9. fd) 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 S1.25 per week at substantially equal intervals not exceeding one 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 (e) Conversion of Charge Account into Instalment Credit Prior to Default.—If the seller and purchaser agree to convert into an instalment credit4 the whole or any part of a charge account arising from the * Renewals, revisions, and additions of instalment credits growing out of charge accounts are subject to the provisions of section 10. REGULATION W 11 sale of a listed.article the charge for which is not in default, the agreement shall be in writing and shall provide that the instalment credit shall be retired within 6 months from the date of the agreement by substantially equal payments of not less than $5.00 per month or $1.25 per week, at substantially equal intervals not exceeding one month. (/) "Floor Authorizations".—A Registrant shall not be deemed to have violated section 5(b) if he makes a charge sale of a listed article, the cash price of which is $5.00 or less, for immediate delivery to the customer in person and (1) the person authorizing such charge sale on behalf of the Registrant acts in good faith without knowledge that the customer's charge account is in default, and (2) the Registrant, upon discovery that such charge account is in default, promptly requests the return of, or the immediate payment in full for, the article sold. SECTION 6. INSTALMENT LOANS Except as otherwise permitted by this regulation, each loan shall comply with the following requirements: (a) Instalment Loans to Purchase Listed Articles.—If trant knows or has reason to know that the proceeds of an loan (defined to exclude loans of more than $1,500) are to purchase any listed article having a cash price of $15.00 or instalment the Regisinstalment be used to 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 Group 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 Group 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 Group 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 12 REGULATION W 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 regulation, 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 written 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 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 Borrower as to the purposes of the loan in form prescribed by the Board. No obligor shall willfully make any material misstatement or omission in such a Statement. If the 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. SECTION 7. SINGLE-PAYMENT LOANS Except as otherwise permitted by this regulation, each single-payment 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 singlepayment 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 Group C of section 13(a); and REGULATION W 13 (ii) The principal amount lent may be not more than fourfifths of the cash price of a piano or furniture as defined in Group 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 90 days, except as permitted by section 9. (b) 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 (denned 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, 1942 may be renewed or extended by means of an instalment loan complying with the requirements of sections 6(b) and 6(c)(2) with the maturity"' calculated from the date on which the original singlepayment 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 instalment 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 instalment loan subject to the provisions of section 6(b); 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 respect to any obligation of any 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 bona fide collection effort by the Registrant. 5 The maturity must not be later than twelve months from the date on which the original loan waa 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 he 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 th*n twelve months from the date of such renewal or extension. 14 REGULATION W (d) Statement of the Borrower.6—No Registrant shall make any 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 purpose of the loan in form prescribed by the Board. No obligor shall willfully make any material misstatement or omission in such Statement. 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. (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 singlepayment 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. EXCEPTIONS This regulation shall not apply to any of the following: (a) Real Estate Loans.—Any extension of credit which is secured by a bona fide 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 securities which is subject to the Board's Regulation T (relating to Extension 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 Carrying 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 instalment 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 bona fide educational, medical, hospital, dental, or funeral expenses, or to pay debts incurred for such expenses; 8 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. EEGTJLATION W 15 (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 purchase 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 regarding the procedure for obtaining such a designation may be obtained through any Federal Reserve Bank or branch. (/) Credit to Dealers.—Any extension of credit to a dealer in any listed article (including a wholesaler, retailer, and a plumbing, electrical, heating or other contractor) to finance the purchase of any such article for resale or installation. (<?) 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 or 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 Loans.—Any loan made by the Disaster Loan Corporation. (i) Agricultural Loans.—Any loan to a person engaged in agriculture, 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 the rehabilitation of a needy farm family, or (3) is for general agricultural purposes and is not for the purpose of purchasing any listed article. In determining whether an extension of credit meets the description 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 16 REGULATION W statement shall be deemed to be correct for the purposes of this regulation. {;) Business Loans.—Any loan for business purposes to a business 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. (I) 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. SECTION 9. SEASONAL ADJUSTMENTS 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 manner as to meet all the other requirements of this regulation applicable to such instalment credit. (6) 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, any instalment credit 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. REGULATION" W 17 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 charge account 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-anntial income is customarily received, (2) any single-payment loan 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 any instalment credit extended to him may be arranged so that the instalment 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. (c) Other Persons with Seasonal Incomes.—If the Registrant has accepted from the purchaser or borrower in good faith a written statement 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 charge account 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 semiannual income is customarily received, (2) any single-payment loan 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 any instalment credit extended to him may be arranged so that the instalment 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. RENEWALS, REVISIONS, AND ADDITIONS OF INSTALMENT CREDIT fa) Renewals or Revisions.—If any obligation evidencing any instalment sale or instalment loan is renewed or revised by a Registrant, 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 7 ; but nothing in 7 If there should be any arrearage under an instalment contract which does not arise out of anv prearrangement or plan to evade this regulation, the arrearage may be 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. 18 REGULATION W this regulation shall be construed to prevent any Registrant from making any renewal or revision, or taking any action that lie shall deem necessary in good faith, (1) with respect to any obligation of any 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 bona fide collection effort by the Registrant. (6) Additions to Outstanding Credit Held by Registrant—An obligation evidencing any instalment sale s or instalment loan shall not be consolidated with any obligation or obligations held by the Registrant 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: Option 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 consolidated, except that, in order to schedule payments at approximately equal intervals, the consolidated obligation may combine payments that would otherwise have fallen due at different times within any monthly period, but the first of such combined payments shall fall due within one month after such consolidation; or Option 2. The consolidated obligation shall provide for a rate of payment (not less than $5.00 per month or SI.25 p?r 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 consolidated 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 instalment 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. 8 The term ''instalment sale" as here used inc]ud»3 an instalment credit resulting frcm the conversion of a charee account to an instalment basis. • If any part of the consolidated obligation is used to reduce or retire a charite account or singlepaynient loan, under the provisions of section 6(b) 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 eniint monthlv instalments. 10 The term "instalment sale" as here used includes an instalment credit resulting from the conversion of a charge account to an instalment basis. BEGXJLATION W 19 (d) Statement of Necessity to Prevent Undue Hardship.—Notwithstanding 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(b), except that the payments need not be as large as 15.00 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, in form and content prescribed by the Board, 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 the principal facts and circumstances with respect to such contingencies 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 requirement 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 Registrant 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 20 REGULATION W 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. MISCELLANEOUS 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 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. (6) 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 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 into two or more parts and eacli 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. (rf) "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 receiving delivery thereof, the Registrant may, for the purposes of this regulation, 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 REGULATION W 21 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.—Whenever this regulation is amended to add any article to the list of articles specified in section 13 (a) or so as to apply to any additional class of transactions, the amendment shall not prevent the performance 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 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) Records and Reports.—Every Registrant shall keep such records and make such reports as the Board may from time to time require as necessary or appropriate for enabling it to perform its functions under the Executive Order. (i) Production of Records.—Every Registrant, as and when required by the Board, shall furnish complete information relative to any transaction within the scope of the Executive Order, including the production of any books of account, contracts, letters, or other papers in connection therewith. (j) Transactions Outside United States.—Nothing in this regulation 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. (k) 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 permitted by this regulation. (I) Sets and Groups of Articles.—For the purposes of this regulation, the word "article" shall be deemed to include any set, group or 22 HEGTJLATION W assembly commonly considered, sold or used as a single unit, if the component parts thereof are sold or delivered at substantially the same time. SECTION 13. LISTED ARTICLES, DOWN PAYMENTS AND MAXIMUM 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. Air conditioners, room unit. 2. Air conditioning systems, home. 3. Aircraft (including gliders). 4. Attic ventilating fans. * 5. Automobile batteries and accessories. * 6. Automobile tires and inner tubes, for passenger automobiles. "b 7. Bedding, blankets, curtains, draperies, and household linens and towels. 8. Bicycles. * 9. Binoculars, field glasses, opera glasses, and hand telescopes. c 10. Boats, and inboard and outboard motors designed for use therewith, other than boats or motors designed specifically for commercial use. b 11. Clocks, electric or other, designed for household or personal use. 12. Cooking stoves and ranges, designed for household use. 13. Dishwashers, electric, designed for household use. " 14. Electric appliances, not elsewhere listed, designed for household or personal use. b 15. 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). 16. Furnaces and heating units for furnaces, household (including oil burners, gas conversion burners, and stokers). 17. Heating stoves and space heaters, designed for household use. 18. Ironers designed for household use. "d 19. Jewelry (including precious stones and costume jewelry). 20. Lamps designed for household use. '21. Lawn mowers, edgers. and trimmers (whether or not power-driven). "22. Lighting fixtures designed for household use. °b 23. Luggage, purses, handbags, toilet cases, and umbrellas. 24. Motion picture cameras, projectors, and lenses, designed for film gauges less than 35 mm.; still cameras, projectors, lenses and shutters, and enlargers. e 25. Musical instruments not elsewhere listed. 26. Organs, household electric. 27. Plumbing and sanitary fixtures designed for household use. D 28. Portable lights, and portable or stationary flood-lighting equipment, designed for household use. 29. Radio receiving sets, phonographs, or combinations. 30. Refrigerators, mechanical, of less than 12 cubic feet rated capacity. 31. Sewing machines designed for household use. b 32. Silverware (including flatware and hollow ware, whether solid or plated). * 33. Sports', athletic, outing, and games' equipment. * 34. Suction cleaners and mechanical carpet sweepers, designed for household use. * 35. Tableware and kitchen ware, equipment, and utensils, designed for household use (including pottery, porcelain, chinaware, glassware, and cutlery). 36. Washing machines designed for household use. • Added effective May 6, 1942. » Added effective March 23, 1942. Boats other than power driven hosts added effective May 6, 1942. Lamps previously classified as furniture. * Lawn mowers, mower-type edgers and trimmers added effective March 23, 1942. Edgers and trimmers other than mower-type, musical instruments other than those composed principally of metal, and mechanical carpet sweepers added effective May 8, 1942. c d REGULATION W 23 "37. 38. 39. • 40. Watches. Water heaters designed for household use. Water pumps designed for household use. Wearing apparel and furs, non-military, (including footwear, headwear, and haberdashery). *41. Yard goods designed for making garments or for making articles of household use. Group B—SO per cent down and 12 months' maximum maturity: ' 1. Furniture, household (including ice refrigerators, bed springs, and mattresses). 2. Pianos. Group C—12 months' maximum maturity: 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 non-residential use), provided the deferred balance does not exceed $1,500. Group D—Maximum maturity 15 months; for down payment requirement see section 13(c): 1. Automobiles (passenger cars designed for the purpose of transporting less than 10 passengers, including taxicabs). 2. Motorcycles (two- 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 the case of an article listed in Group B, 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 » Added effective May 6, 1942. Added effective March 23, 1942. Used furniture added effective May 6, 1942. h c 24 REGULATION" W in the territory in which such used automobile is sold, plus any applicable 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 pursuant 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 listed in Group 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 Group 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. SECTION 15. EFFECTIVE DATE OF REGULATION This regulation became effective in its original form September 1, 1941; Amendment No. 1 became effective September 20, 1941; Amendment Xo. 2 became effective December 1, 1941; Amendment Xo. 3 became effective March 23, 1942, except that the change made in Part 3(b> of the Supplement by Amendment No. 3 became effective April 1, 1942. This revised regulation shall become effective May 6, 1942. LIST OF FEDERAL RESERVE BANKS AND BRANCHES Federal Reserve Bank of BOSTON NEW YORK Buffalo Branch PHILADELPHIA CLEVELAND Cincinnati Branch Pittsburgh Branch ,. Address 30 Pearl Street, Boston, Massachusetts 33 Liberty Street, New York, New York 270-276 Main Street, Buffalo, New York 925 Chestnut Street, Philadelphia, Pennsylvania East 6th Street and Superior Avenue, Cleveland, Ohio Fourth and Race Streets, Cincinnati, Ohio 717 Grant Street, Pittsburgh, Pennsylvania RICHMOND Baltimore Branch Charlotte Branch 9th and Franklin Streets, Richmond, Virginia Calvert and Lexington Streets, Baltimore, Maryland First National Bank Building, Charlotte, North Carolina ATLANTA Birmingham Branch Jacksonville Branch Nashville Branch New Orleans Branch 104 Marietta Street, Atlanta, Georgia 18th Street and 5th Avenue, North, Birmingham, Alabama Church and Hogan Streets, Jacksonville, Florida 228 3rd Avenue, North. Nashville, Tennessee Carondelet and Common Streets, New Orleans, Louisiana 230 South LaSalle Street, Chicago, Illinois 160 Fort Street, West, Detroit, Michigan CHICAGO Detroit Branch ST. LOUIS Little Rock Branch Louisville Branch Memphis Branch MINNEAPOLIS Helena Branch KANSAS CITY Denver Branch Oklahoma City Branch Omaha Branch 411 Locust Street, St. Louis. Missouri 121 West 3rd Street, Little Rock. Arkansas 5th and Market Streets, Louisville, Kentucky 3rd and Jefferson Streets, Memphis, Tennessee 73 South Fifth Street, Minneapolis, Minnesota Park Avenue and Lawrence Street, Helena, Montana 10th Street and Grand Avenue, Kansas City, Missouri 17th and Arapahoe, Denver. Colorado 226 West Third Street, Oklahoma City, Oklahoma 1701-5 Dodge Street, Omaha, Nebraska DALLAS El Paso Branch Houston Branch San Antonio Branch Wood and Akard Streets, Dallas, Texas 351 Myrtle Avenue, El Paso, Texas 1301 Texas Avenue, Houston, Texas Navarro and Villita Streets, San Antonio, Texas SAN FRANCISCO Sacramento and Sansome Streets. San Francisco, California 409 West Olympic Boulevard, Los Angeles, California 6th and Oak Streets, Portland, Oregon 70 East South Temple Street. Salt Lake City. Utah 2nd Avenue and Spring Street, Seattle, Washington Los Angeles Branch Portland Branch Salt Lake City Branch Seattle Branch FEDERAL RESERVE DISTRICTS _ M —— IOUNDAHM OF FIOEML KESEtVC pISMICTS BOUMDARIE6 OF FEDERAL HESEUVE HAMCH TE»«irO*lES iAPPROIIMATE IN IHI ST. LOUIS DISTRICT) @ • O FEDE»*L RESERVE l A N t CITIH FEDHAL RISERVE (KANCH CITIES FEDMAL RESERVE IANK AGENCY Please forward to us ..additional copies of Regulation W of the Board of Governors of the Federal Reserve System as revised effective May 6, 1942; ..copies of Registration Statement designated as Form F.R. 563-a; and ..additional copies of your Circular No. 2 4 2 8 . (Date) (•Name—typewrite or print) (Street Address) (City or Town) (State) FEDERAL RESERVE BANK OF NEW YORK Federal Reserve Station, P. 0., New York, N. Y.