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FE D E R A L R E SE R V E BANK OF NEW YORK r Circular No. 3 6 3 4 1 L December 27, 1950 J REGULATION W CONSUM ER C R E D IT Large Quantity Sales o f Listed Articles To all Persons Concerned with Regulation W in the Second Federal Reserve D istrict: W e quote fro m a letter received fr o m the B oard o f G overnors of the F ederal R eserve System in response to questions relating to sales o f refrigerators in large quantities, with the total contract aggregating more than $2,500, but with a series of individual deliveries which would each involve less than $ 2,5 0 0: The Board has recognized that sales o f refrigerators (and some other listed articles) in large quantities may have characteristics somewhat different from sales o f the articles in smaller quantities. On the other hand, such large orders also have many o f the features that are common to any other sales o f the articles. A s a matter o f practical administra tion, it has not seemed feasible to try to draw a distinction between such transactions except on the basis o f the amount o f the credit. F or similar reasons, it has not seemed desirable or feasible to attempt to prescribe a rule that would vary with the many different versions o f contracts fo r large quantities. It has seemed to be sounder to treat each delivery as a separate extension o f credit unless and until such individual credits are combined into a single larger debt. A ccordingly, individual deliveries should be considered subject to the regulation when the individual amount o f credit involved in the delivery is $2,500 or less. This would be true even though the deliveries are made under a contract providing fo r eventual deliveries and credit in excess o f that amount. However, when several deliveries have been made, the regulation would not prevent the individual credits being combined into a single obligation, and the combined obligation then would be exempt under section 7 (a ) if it exceeded $2,500 and did not involve automobiles. A dditional copies o f this circular will be furnished upon request. A llan S proul, President.
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