View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

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.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102