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FE D ERAL R E SE R V E BANK O F N E W YO R K J" Circular No. 3 7 3 9 1 L July 31, 1951 J CONSUMER CREDIT Am endm ent No. 4 to Regulation W o f the B oard o f Governors o f the Federal Reserve System, Effective July 31, 1951 To all Persons Concerned with Regulation W in the Second Federal Reserve District: The B oard o f G overnors o f the F ederal R eserve System has approved Am endment No. 4 to R egulation W , effective J u ly 31, 1951. F ollow in g is the text o f the statement issued by the B oard o f G overnors relating to the amendment, and released fo r immediate publication: The Board o f Governors today amended the terms o f Regulation W — Consumer Credit— in accordance with the Defense Production A ct as revised and extended. The Amendment, which is effective immediately, lengthens the maximum maturity applicable to instalment credit fo r automo biles, household appliances, radio and television sets, and furniture from 15 to 18 months, and for home repair and improvements from 30 to 36 months. Longer maximum maturities are also provided fo r consumer instalment loans fo r other purposes. In accordance with the new legislation, down payment requirements for household appliances and for radio and television sets have been reduced from 25 per cent to 15 per cent. The down p ay ments required b y the regulation m ay be made in cash, trade-in, or a combination o f trade-in and cash. The 10 per cent down payment required fo r home repair and improvements now need not be obtained prior to com pletion o f the work. The follow in g table summarizes the revised terms o f the regu lation : Type o f instalment credit Automobiles ....................................................................... Household appliances, radio, and television s e t s .. . . Furniture ........................................................................... Residential repairs and improvements ...................... Unclassified instalment l o a n s ......................................... Maxim um maturity Required down paym ent 33 15% 15% 10 % 18 18 18 36 18 months months months months months In addition, the B oard exempted from the provisions o f Regulation W any instalment credit required fo r the installation o f sewerage and other related facilities, including plum bing and plum bing fixtures, where the householder is required to make such installation by local, State or Federal health and sanitary regulations. A printed cop y o f Am endm ent No. 4 to Regulation W is enclosed; additional copies may be obtained upon request. A llan S proul, President. AMENDMENT NO. 4 TO REGULATION W IS S U E D B Y T H E B O A R D O F G O V E R N O R S OF T H E F E D E R A L R E S E R V E S Y S T E M Regulation TV is hereby amended in the follow ing respects, effective J u ly 31, 1951: (1 ) B y inserting in section 1 follow in g “ Defense Production A ct o f 1950,” the language “ as am ended,” . (2 ) B y amending subsection (c ) o f section 3 to read as fo llo w s : “ (c) T im e o f Down Payment.— The clown payment shall be obtained at or before the time o f delivery o f the listed a rticle; except that in the case o f an article listed in Group D, neither this section 3 ( c ) , section 6 (&), nor section 6 ( / ) shall be deemed to require compliance in advance o f com pletion o f the agreed upon repairs, alterations, or im provem ents.” (3 ) B y inserting in tion 3 the w ord “ a n d ” comma after the word period, and b y deleting the first sentence before the figure “ m onth” at the the remainder o f o f subsection (b ) o f sec “ (2 ) ” , by changing the end o f clause ( 2 ) to a such sentence. (4 ) B y inserting in the first sentence o f subsection ( c ) o f sec tion 4 the w ord “ a n d ” before the figure “ (2 ) ” , by changing the comma after the w ord “ m onth” at the end o f clause ( 2 ) to a period, and by deleting the remainder o f such sentence. (5 ) B y deleting the last sentence o f paragraph (2 ) o f subsec tion (a) o f section 5. ( 6 ) B y deleting the last sentence o f the first paragraph o f sub section (b ) o f section 5. (7 ) B y amending item (3 ) in subsection (c ) o f section 6 to read as follow s: “ (3 ) The amount o f the purchaser’s down payment (i) in cash and (ii) in property accepted as trade-in, together with a brief description identifying such property and stating the monetary value assigned thereto in good f a it h ;” . ( 8 ) B y amending the last two sentences o f subsection ( c ) of section 6 to read as follow s: “ The record need not include a description o f the article if it is purchased by means o f a coupon book o r similar medium of instalment credit upon which there has been made a down p ay ment at least as great as the down paym ent required b y this regulation on the article sold by the Registrant. The record need not include the inform ation called fo r by items (2 ) and (4 ) if the Registrant is one who, with respect to the article, custom ( over) ar l quotes t the public a time price only which includes the iy o finance or other charges i any, provided he s t forth s c i time f es ul price in such record, and provided he obtains a down payment which i a l a t as large a would be required i the percentage s t es s f s eci d for the a t c e in the Supplement were applicable t p fie ril o the time price.” (9 By amending subsection ( ) of section 6 t read as follows: ) j o “( ) Trade-in.— Any property which the s l e of a l s e j elr itd a t c e buys or r ril eceives in exchange, or arranges t have bought o or s r o eceived, from the purchaser at or about the time of the purchase of the l s e a t c e s a l be regarded as a trade-in for itd ril hl the purposes of t i regulation.” hs (10) By adding a the end of section 7 a new subsection (m) t reading as follows: “ ( m) Credit fo r Sewerage Installations.— Any credit for the purpose of financing the i s a l t o of sewerage and neces ntlain sary related f c l t e (including plumbing and plumbing f x aiiis i tures), required in order t comply with a s a u e ordinance, o ttt, or regulation of the United S a e , a State or p l t c l subdivi tts oiia sion t e e f pertaining t health and s n t t o , where the hro, o aiain Registrant accepts in good f aith a written statement signed by the obligor certifyingthat such credit i for the above purpose.’ s ’ (11) By changing “ 25 per cent” and “ 75 per ccnt” in Part 1 , Group B of the Supplement to read, r s e iv , “ 15 per cent” e p ct ely and “ 85 per cent” . (12) By changing the maximum maturity stated in Part 2 o f the Supplement for a t c e l s e in Group A, Group B, Group C rils itd and for Unclassified Instalment Loans, r s e ive e p ct ly, from “15 months” t “18 months”,and for a t c e l s e in Group D from o rils itd “ 30 months” t “36 months”. o (13) By changing the figure “ 18” t “21” in Part 3 of the o Supplement. (14) By deleting from the l s sentence in the f r t paragraph at is of Part 4 of the Supplement the language “ in the case of an automobile”. (15) By amending the f r tparagraph of Part 5 of the Supple is ment t read as follows: o “ Part 5. Calculation o f Down Payments fo r Articles in Groups B, C, and D. — In the case of any a t c e l s e i ril itd n Group B, Group C, or Group D, the required down payment and the maximum loan value s a l be the s e i i d percentage o hl pcfe f the cash price of the a t c e Such required down payment may ril. be obtained in the form of cash, t a e i , or both.” rd-n P R IN T E D IN NEW YORK