the creditor participates, the adjusted debit balance shall be computed according to the foregoing rule and the supplementary rules prescribed in §§ 220.6 (a) and 220.6 (b). [Last paragraph amended effective July 16, 1945, 10 F.R. 8422] § 220.4 Special accounts.

(b) Special omnibus account. In a special omnibus account, a member of a national securities exchange may effect and finance transactions for a broker or dealer from whom the member accepts in good faith a signed statement to the effect that he is subject to the provisions of this part (or that he does not extend or maintain credit to or for customers except in accordance therewith as if he were subject thereto) and from whom the member receives (1) written notice, pursuant to a rule of the Securities and Exchange Commission concerning the hypothecation of customers' securities by brokers or dealers (Rule X-8C-1 or Rule X-15C2-1), to the effect that all securities carried in the account will be carried for the account of the customers of the broker or dealer and (2) written notice that any short sales effected in the account will be short sales made in behalf of the customers of the broker or dealer other than his partners. [Paragraph (b) amended, effective July 16, 1945, 10 F.R. 8422]

(c) Special cash account.

CODIFICATION: Paragraph (c) (5) was amended by striking out both provisos, and subparagraph (6) was amended by inserting the words "or a national securities association" following the words “a national securities exchange", effective July 16, 1945, 10 F.R. 8422.

(8) Unless funds sufficient for the purpose are already in the account, no security other than an exempted security shall be purchased for, or sold to, any customer in a special cash account with the creditor if any security other than an exempted security has been purchased by such customer in such an account during the preceding 90 days, and then, for any reason whatever, without having been previously paid for in full by the customer, the security has been sold in the account or delivered out to any broker or dealer: Provided, That an appropriate committee of a national securities exchange or a national securities association, on application of the creditor, may authorize the creditor to disregard for the purposes of this

§ 220.4 (c) (8) any given instance of the type therein described if the committee is satisfied that both creditor and customer are acting in good faith and that circumstances warrant such authorization. [Subparagraph (8) added, effective July 16, 1945, 10 F.R. 8422]

(g) Specialists account. In a special account designated as a specialist's account, a creditor may effect and finance, for any member of a national securities exchange who is registered and acts as a specialist in securities on the exchange, such member's transactions as a specialist in such securities, or effect and finance, for any joint adventure in which the creditor participates, any transactions in any securities of an issue with respect to which all participants, or all participants other than the creditor, are registered and act on a national securities exchange as specialists; and such specialist's account shall be subject to all the conditions to which it would be subject if it were a general account except that:

(1) At any time when the Board in § 220.8 shall have prescribed for specialists' accounts a special maximum loan value or special margin for short sales, the maximum loan value of a registered security (other than an exempted security) having loan value in such specialist's account shall be such special maximum loan.value, and the amount to be included in the adjusted debit balance of such account as the margin required for short sales shall be such special margin for short sales.

(2) A specialist's account shall not be subject to the restrictions specified in the second paragraph of § 220.3 (b) but a transaction consisting of a withdrawal of cash or registered or exempted securities from the account shall be permissible only on condition that the transactions (including such withdrawal) on the day of such withdrawal would not create an excess of the adjusted debit balance of the account over the maximum loan value of the securities in the account or increase any such excess. [Paragraph (g) added, effective July 5, 1945, 10 F.R. 8422]

[Paragraph (c) amended effective July 16, 1945, 10 F.R. 8422]

§ 220.8 Supplement-(a) Maximum loan value for general accounts. The maximum loan value of a registered security (other than an exempted security) in a general account, subject to § 220.3 shall be 50 per cent of its current market value.

(b) Maximum loan value for special omnibus accounts. The maximum loan value of a registered security (other than an exempted security) in a special omnibus account, subject to § 220.4, shall be 65 per cent of its current market value.

(c) Margin required for short sales. The amount to be included in the adjusted debit balance of a general account pursuant to § 220.3 (d) (3), as margin required for short sales of securities (other than exempted securities) shall be 50 per cent of the current market value of each such security, and in the case of a special omnibus account with another member, broker or dealer, such amount shall be 35 per cent of such current market value. (Sec. (a) and (b), sec. 7 (a), (b), (c) and (d), sec. 8 (a), sec. 17 (b) and sec. 23 (a), 48 Stat. 881, 886, 888, 897, and 901, sec. 8, 49 Stat. 1379; 15 U.S.C. 78c(a) and (b), 78g-(a), (b), (c) and (d), 78h-(a), 78q-(b), 78w-(a)) [Supp. to Reg. T, Feb. 5, 1945, 10 F.R. 1472]

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

§ 220.8 Supplement—(a) Maximum loan value for general accounts. The maximum loan value of a registered security (other than an exempted security) in a general account, subject to § 220.3, shall be 25 per cent of its current market value.

(b) Maximum loan value for specialists' accounts. The maximum loan value of a registered security (other than an exempted security) in a specialist's account, subject to § 220.4 (g), shall be 50 per cent of its current market value.

(c) Margin required for short sales in general accounts. The amount to be included in the adjusted debit balance of a general account, pursuant to § 220.3 (d) (3), as margin required for short sales of securities (other than exempted securities) shall be 75 per cent of the current market value of each such security.

(d) Margin required for short sales in specialists' accounts. The amount to be included in the adjusted debit balance of a specialist's account, subject to § 220.4 (g), as margin required for short sales of securities (other than exempted securities) shall be 50 per cent of the current market value of each such security. (Sec. 3 (a) and (b), sec. 7 (a), (b), (c)

and (d), sec. 8 (a), sec. 17 (b) and sec. 23 (a), 48 Stat. 881, 886, 888, 897, and 901, sec. 8, 49 Stat. 1379; 15 U.S.C. 78c(a) and (b), 78g—(a), (b), (c) and (d), 78h-(a), 78q-(b), 78w-(a)) [Reg., effective July 5, 1945, 10 F.R. 8422]

PART 221-LOANS BY BANKS FOR THE PURPOSE OF PURCHASING OR CARRYING REGISTERED STOCKS

Sec. 221.1

221.2

General rule. [Amended]

Exceptions to general rule. [Amended] 221.3 Miscellaneous provisions. [Amended] 221.4 Supplement. [Revised]

§ 221.1 General rule.

While a bank maintains any such loan, whenever made, the bank shall not at any time permit any withdrawal or substitution of collateral if, after such withdrawal or substitution, the loan exceeds the maximum loan value of the collateral, unless:

(1) In the case of a withdrawal, the loan is reduced by an amount equal to the current market value of the collateral withdrawn; or

(2) In the case of a substitution, the loan is reduced by an amount equal to any excess of the current market value of the collateral withdrawn over the maximum loan value of the collateral deposited.

If the maximum loan value of the collateral has become less than the amount of the loan, such amount may nevertheless be increased if there is provided additional collateral having maximum loan value at least equal to the amount of the increase.

CODIFICATION: In § 221.1, the last paragraph was deleted, and the text set forth above was substituted in lieu thereof, effective July 16, 1945, 10 F.R. 8423.

*

§ 221.2 Exceptions to general rule.

(b) Any loan made prior to July 16, 1945, to any person whose total indebtedness to the bank at the date of and including such loan does not exceed $1,000. [Paragraph (b) amended, effective July 16, 1945, 10 F.R. 8423]

(e) Any loan to a broker or dealer secured by any securities which, according to written notice received by the bank from the broker or dealer pursuant to a rule of the Securities and Exchange

Commission concerning the hypothecation of customers' securities (Rule X-8C-1 or Rule X-15C2-1), are securities carried for the account of one or more customers, Provided, The bank accepts in good faith from the broker or dealer a signed statement to the effect that he is subject to the provisions of Part 220 of this chapter (or that he does not extend or maintain credit to or for customers except in accordance therewith as if he were subject thereto). [Paragraph (e) amended, effective July 16, 1945, 10 F.R. 8423]

(o) A loan to a member of a national securities exchange who is registered and acts as a specialist in securities on the exchange for the purpose of financing such member's transactions as a specialist in such securities shall not be subject to the provisions of the third paragraph of § 221.1, but the bank shall not at any time permit withdrawals or substitutions of collateral for such a loan that would create or increase a deficiency in the maximum loan value of the collateral below the amount of the loan, nor shall the bank increase the amount of a loan if the collateral is deficient unless additional collateral is provided having maximum loan value at least equal to the amount of the increase. [Paragraph (0) amended, effective July 5, 1945, 10 F.R. 8423]

§ 221.4 Supplement-(a) Maximum loan value of stock. For the purpose of § 221.1, the maximum loan value of any stock, whether or not registered on a national securities exchange, shall be 50 per cent of its current market value, as determined by any reasonable method.

(b) Loans to brokers and dealers. Notwithstanding the foregoing, a stock, if registered on a national securities exchange, shall have a special maximum loan value of 65 per cent of its current, market value, as determined by any reasonable method, in the case of a loan to a broker or dealer from whom the bank (1) accepts in good faith a signed statement to the effect that he is subject to the provisions of Part 220 of this chapter (or that he does not extend or maintain credit to or for customers except in accordance therewith as if he were subject thereto); and (2) receives written notice, pursuant to a rule of the Securities and Exchange Commission concerning the hypothecation of customers' securities by brokers or dealers (Rule X8C-1 or Rule X-1502-1), to the effect that the stock is a security carried for the account of a customer. (Secs. 3 (a) and (b), 7, 17 (b),

48 Stat., 882, 886, 897, sec. 23 (a) as amended by sec. 8, 49 Stat. 1379; 15 U.S.C. and Sup., 78c, 78g, 78q (b), 78w (a)) [Supp. to Reg. U, effective Feb. 5, 1945, 10 F.R. 1472]

[Preceding section, in small type, superseded by following section during period covered by this Supplement]

Maximum

§ 221.4 Supplement—(a) loan value of stock. For the purpose of § 221.1, the maximum loan value of any stock, whether or not registered on a national securities exchange, shall be 25 per cent of its current market value, as determined by any reasonable method.

(b) Loans to specialists. Notwithstanding the foregoing, a stock, if registered on a national securities exchange, shall have a maximum loan value of 50 per cent of its current market value, as determined by any reasonable method, in the case of a loan to a member of a national securities exchange who is registered and acts as a specialist in securities on the exchange for the purpose of financing such member's transactions as a specialist in securities. (Secs. 3 (a) and (b), 7, 17 (b), 48 Stat., 882, 886, 897, sec. 23 (a) as amended by sec. 8, 49 Stat. 1379; 15 U.S.C. and Sup., 78c, 78g, 78q (b), 78w (a)) [Reg., effective July 5, 1945, 10 F.R. 8423]

PART 222-CONSUMER CREDIT

CODIFICATION: In § 222.6 (b), "12 months" was deleted and "18 months" substituted in lieu thereof, by Amendment, Board of Governors of the Federal Reserve System, effective Oct. 15, 1945, 10 F.R. 12379.

§ 222.7 Single-payment loans.

CODIFICATION: § 222.7 (c) was amended, effective Oct. 15, 1945, 10 F.R. 12379, by inserting "222.6 (a) or" before "222.6 (b)" in subparagraphs (1) and (2) and by striking out the text of footnote 5 and substituting in lieu thereof the following text:

The maximum maturity is 6, 12, 15, or 18 months from the date of the original loan as determined by its purpose, except that 18 months from the date of renewal or extension is permissible with a Statement of Necessity pursuant to § 222.10 (d).

§ 222.8 Exceptions.

(a) Real estate and home improvement loans. Any extension of credit which is for the purpose of financing or refinancing (1) the construction or purchase of an entire residential building or other entire structure or (2) repairs, alterations, or improvements upon urban, suburban or rural real property in connection with existing structures.

CODIFICATION: In paragraph (a) of § 222.8, the words "which is secured by a bona fide first lien on improved real estate duly recorded or" were deleted by Amendment, Board of Governors of the Federal Reserve System, May 22, 1945, effective June 11, 1945, 10 F.R. 6366, and subsequently, paragraph (a) was amended to read as set forth above, effective Oct. 15, 1945, 10 F.R. 12379.

(h) Agricultural loans.

CODIFICATION: The former paragraphs (1), (j), (k) and (1) were redesignated (h), (1), (j) and (k), May 22, 1945, effective June 11, 1945, 10 F.R. 6344, and subsequently paragraph (h) was amended by inserting in subparagraph (1) the words "or by any Federal land bank" following the words "Federal Farm Mortgage Corporation", effective July 27, 1945, 10 F.R. 9422.

(1) Railroad watches. Any extension of credit to finance the purchase of a railroad standard watch (whether new or used) by a railroad time service employee: Provided, The registrant obtains a statement signed by the division superintendent of the railroad by which the purchaser is employed certifying that the purchaser is required to carry such a watch in the performance of his duties and has no watch suitable for the purpose.

(m) Fuel conservation credits. [Revoked]

CODIFICATION: The former paragraph (m) was revoked, and paragraphs (n), (0), and (p) were redesignated (1), (m), and (n), respectively, May 22, 1945, effective June 11, 1945, 10 F.R. 6366, and subsequently the redesignated paragraph (1) was amended to read as set forth above effective July 27, 1945, 10 F.R. 9422.

(0) Servicemen's guaranteed loans. Any extension of credit guaranteed in whole or in part by the Administrator of Veterans' Affairs pursuant to the provisions of Title III of the Servicemen's Readjustment Act of 1944, or by any State agency pursuant to similar State legislation.

(p) Demonstrators. Any extension of credit which is to be repaid within not more than 12 months and is made to a bona fide salesman of automobiles in order to finance the purchase of a new automobile to be used by him principally as a demonstrator.

CODIFICATION: The former paragraph (q) Servicemen's guaranteed loans, was amended

to read as set forth above effective Feb. 5, 1945, 10 F.R. 1665, and was subsequently redesignated paragraph (0), May 22, 1945, effective June, 1945, 10 F.R. 6366. A new paragraph (p) was added effective Dec. 1, 1945, 10 F.R. 14362.

§ 222.10

Renewals, revisions, and additions of instalment credit.

CODIFICATION: § 222.10 was amended in the following respects, by Amendment, Board of Governors of the Federal Reserve System, effective Dec. 1, 1945, 10 F.R. 14362:

1. The following sentence was added to footnote 7 attached to paragraph (a): "Whenever the regulation is amended to increase the maximum maturity for any class of transactions, the terms of repayment 'permitted in the first instance' in so far as they relate to the maximum maturity for such class of transactions shall be deemed to be the terms applicable under the provisions of the amendment."

2. At the end of option 2 of paragraph (b), after the words "12 months", a comma and the following text were added: "or within 18 months in case the consolidated obligation is an instalment loan and no part of the proceeds of the additional credit is to be used to purchase any listed article having a cash price of $15.00 or more."

§ 222.12 sions.

(0)

*

*

Miscellaneous provi

Summer plans. Notwithstanding §§ 222.4 (c) and 222.6 (c) (2) the payment schedule of an instalment credit made for any of the purposes specified in § 222.13 (f) may reduce or omit payments during the period from the extension of the credit to October 31, 1945, if the other payments are increased in such manner as to meet all the other requirements of the regulation applicable to such credit. [Paragraph (0) added May 22, 1945, effective June 11, 1945, 10 F.R. 6366]

CODIFICATION: Paragraph (o) was revoked, effective Oct. 15, 1945, 10 F.R. 12379.

§ 222.13 Listed articles, down payments and maximum credit values.

CODIFICATION: § 222.13 was amended during the period covered by this Supplement in the following respects:

In paragraph (a), the names of the articles listed as Items 2, 16, 22, 27, 38 and 39 in

Group A were deleted and "(Deleted-see Group C)" was inserted in lieu thereof, May 22, 1945, effective June 11, 1945, 10 F.R. 6366. Item 3 was amended effective July 27, 1945, 10 F.R. 9422 to read as follows:

3. Aircraft (including gliders) designed for a useful load of 1,000 pounds or less.

Group C, with footnote, was amended May 22, 1945, effective June 11, 1945, 10 F.R. 6366 to read as follows:

Group C-18 months' maximum maturity

1. Materials, articles 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 $1,500.11

Subsequently, the text of Group C was deleted and "(Deleted-see § 222.8 (a))" was inserted following the figure 1, effective Oct. 15, 1945, 10 F.R. 12379.

Paragraph (f) was added, as set.forth below, May 22, 1945, effective June 11, 1945, 10 F.R. 6366, and subsequently revoked, effective Oct. 15, 1945, 10 F.R. 12379:

(f) Fuel conservation credits. Notwithstanding the provisions of Group C of § 222.13 (a), any extension of instalment credit made prior to November 1, 1945, to finance the purchase or installation of materials or articles included in Group C that are to be used in (1) the replacement of heating equipment that is worn out, damaged beyond repair, or destroyed, (2) the installation of loose-fill, blanket or batt-type insulation, or insulating board, within existing structures, or (3) the installation of storm doors, storm windows, or weather stripping, may have a maturity of not more than 24 months if such extension of credit is otherwise in conformity with the requirements of this part.

11 Effective June 11, 1945, the following articles were added to this group: Air conditioning systems, furnaces and heating units for furnaces (including oil burners, gas conversion burners, and stokers), lighting fixtures, plumbing and sanitary fixtures, water heaters, and water pumps so installed, whether or not designed for household use.