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Minutes of actions taken in New York by the Board of Governors °r the Federal Reserve System on Tuesday, September 19, 1950. PRESENT: Mr. Mr, Mr. Mr. Mr. Mr. McCabe, Chairman Szymczak Evans Vardaman Norton Powell Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Fecier Minutes of actions taken by the Board of Governors of the al Reserve System on September 15, 1950, were approved unanimously. Letter to Mr. Knoke, Vice President of the Federal Reserve 11411kol' New y°rIt, reading as follows: 8,lotahie is in reply to your letter of September aitio r requesting that the Board increase the Of bankers acceptances which may be purtat;,vith Your bank's guarantee of payment at and one time by your bank to;f loreign held at central banks (including the Bank 2th ilternational Settlements). In accordance Your request the Board has increased from aatot,11-°/1 dollars to 50 million dollars the eald-71°f ac ceptances which may be so purchased tiotze.4c1 in 9 4', oUt accordance with the terms and condilined in the Board's letter of February 937 "A copy of this letter is being sent to the 14rfa.,,ellts of all Federal Reserve banks for their i re8iC Approved unanimously. Letter to Mr. toe4 Los Maurice C. Sparling, President, National Of Supervisors of State Banks, 215 West Sixth Street, ies ) California, reading as follows: 282 9/19/50 "The Board's Regulation W relating to consumer credit, vas issued under the authority of the Defense ProAct of 1950, became effective September 18, 1950. aes of the regulation and of the Board's press release ed S eptember 8, 1950 regarding the regulation are erlelosed. is ap"If the regulation is to accomplish its purposes it elar Parent that it must have effective and uniform the°rcement. Such a program is essential in fairness to e°1 ! uraing public and to those subject to the regulation. s. 41ie Board Wishes to avoid unnecessary duplication of irx : 1114--igations, particularly of banks and other financial ex ituti which are already subject to comprehensive tilation programs. Accordingly, the Board, as it did WarT:Ilection with the regulation in effect during World 1948,4 and later when the regulation was reinstated in Pederoiel,again seeking the cooperation of State and teat z uanking agencies in the administration and enforceman. :.‘ogram. The attached outline sets out the general pres r°r enforcement to be used in connection with the ent regulation. vario"The Board would like to have the cooperation of the balaksUs State bank supervisors with respect to non-insured suisand other institutions under their supervision as e°13Per,:” in I(B)(1) of the attached outline. That 1-?might be extended along the following lines: The State examiners to take appropriate steps in their examinations to promote Understanding of, and compliance with, Regulation W, and to determine whether violations of the regulation exist either as to credits originated by the institution or credits acquired by it from others. 2. If violations by institutions under State suPervision are discovered, which in the °Pinion of representatives of the State supervisor are inadvertent, State representatives to take steps to obtain correction or the violations along the lines which it Is c ontemplated will be taken by the Federal Reserve Banks in similar circumstances under etion II-A of the enclosed Outline of 3, nforcement Program; and If violations by institutions under State suPervision are discovered, which in the V 9h9/50 -3"opinion of representatives of the State supervisor are apparently willful and steps should be taken to determine whether Penalties should be prescribed, State representatives to report the facts in the case to the Federal Reserve Bank of the district in which the apparently Willful violation occurs or to the Board , of Governors. Dart 'While the procedure referred to above relates n.ot pi..?ularlY to non-insured banks and other credit agencies it 4 under Federal supervision, the Board would appreciate vioi4 lar procedures would be followed in the case of any tiorie s! t °11s discovered in the course of independent examinaStpri- - uY State examiners of insured member and. nonmember banks. Reeui"The 'Procedure regarding treatment of violations of the Izent-,,ti°11, as stated in the attached outline of the enforceis the same as the one in effect during 1948-49. be.ei : t_c,IllaY be altered in some minor respects, it will afford Prese 8Z: for the enforcement program in connection with the Partm-:" regulation. The procedure was cleared with the Deli/le-I s-At of Justice in 1948 and a copy of the attached. outelearuasbeen forwarded to the Department of Justice for e-e vieu (T in connection with the present regulation. In 1/e ; 41 the fact that your Association is meeting this week beeri obtained. liriting You at this time before formal clearance has ' We to the shall appreciate it if you will bring this request or at att ention of the National Association of Supervisors repre' este Banks. In carrying out the program, we hope the eaPPro elatatives of the various State bank supervisors and te.rat8Pria.te re presentatives at the various Federal Reserve the pe//ciill Maintain close informal contacts in order that Re Bank representatives may be of all oope .,7'dra. assistance to the State bank supervisors in their „Ii ioa in this program. or the : . 11 clless to say, the Board_ counts on the continuation 'seocia.;Lose cooperation it has enjoyed with the National ,„ 411Y Opt -,„ 4.° 21 of Supervisors of State Banks and will welcome 441,1ti.tea-7"unities, formal or informal, to further the etrici redit co Lt irl ions Promoting and maintaining sound banking
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