Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-21
ASK RED|SCOUNT|NG.
OF SMALL LOANS
Finance Companies Petition
Federal Reserve Board to
Amend Regulations.

With hundreds of millions outstand-
ing in small personal loans at rates Of
interest as high in some States rs 31a
per cent month. the National Associa-
ton of Finance Companies, in annual
sessions here today, petitioned the Fed
eral Reserve Board to amend Its regu-
lations to permit rediscounting of their
notes based on installment sales.
During the last year Of depression,
the companies associated with the as'
ISOLATION extended in excess OF $780,
600 900 in small loans to wage-earners
and persons of modest income who lack
the means of securing such service from
commercial banks. Although operating
in 26 State which have small loan laws,
including Maryland and Virginia, the
finance companies are barred from con-
Quoting their business in the District OF
Columbia.
Stress Obligations.
At the opening session of the con-
vention today. the social and economic
obligations that rest upon personal
finance service in providing funds to
this mass of the population were stressed
by speakers. r. M. KKaufman OF In
dianapolis, president of the association,
presided, AS many as 1900 companies
and offices are affiliated with the or
ganization.
The petition to the Federal Reserve
Board was presented to Eugene Meyer,
jr., governor of the board, through the
associations Executive Committee, which
held a separate conference yesterday.
The finance companies cited the scare
ity of paper eligible for rediscount and
asserted that broadening of the eligible
paper requirements of the Federal Re-
serve Board to include finance COM
no
notes given for inStallment commodity
sales would furnish large amount Of
desirable paper.
The plan, 1t was pointed out, does
not contemplate rediscounting the in
Stallment sales notes themselves. In
stead, the finance companies would
issue their own 90-day notes and re-
discount them at the Federal Reserve
banks.
was held, would stimulate the market
ing of many important classes of COM
modities.
A brief defense of the business meth
DDS of association members was made
by President kaufman in his opening
report to the convention. Due to the
depression and the large numbers of
unemployed throughout the country
he said, the finance companies had been
criticized unjustly and charged with
bringing undue pressure to bear on
small creditors for the repayment of
loans. This he vigorously denied.
Through the association, he declared,
finance companies have guaranteed to
social welfare agencies that no GUS
toner would be made unjustly to pay
loans when they are willing, but I'M
able, due to circumstances.
Addison Praises Service.
Francis G. Addison, jr, of Washing
ton, president of the Securities Saving
& Commercial Bank and a member
| also of the executive council of the
American Bankers Association, said
the finance companies had done much
to relieve conditions among persons
of small means who had no credit which
commercial bank could handle Al
though the District of Columbia has
no small loan law. he said, the Amer.
lean Bankers Association has indicated
willingness to lend its influence for
such law here.
During the past year, it was pointed
out at today's meeting, the association
has established cooperative relation
ship with welfare agencies, emergency
employment organizations and other
relief bodies.
Sessions of the association are being
held at the building of the United
States Chamber Of Commerce. Secretary
Of Labor Doak will address the con-
vention luncheon on Friday.