The Republican. [volume] (Oakland, Md.) 1877-current, 1941-09-04
Restrictions On Credit
Are Now In Effect
Dollar Down and Dollar Every
Month" Era Disappeared
Saturday

saturday
The 81 down and 81 every month
era virtually disappeared Saturday
from the field of consumer buying.
Under Federal Reserve Board rules
drafted at President Roosevelt's
order, it was illegal starting Monday
morning for stores, banks, finance
companies or other businesses tt
give unlimited installment credit
terms to consumers.
On question and answer basis
here's the situation:
Q. Do the rules apply to all con-
sumner transactions?
A. No cash and ordinary charge
account transactions are exempted al
together The rules apply only tc
specified installment sales or loans.
Limit of Time 10 Months
Q. How much is allowed to COM
plete payments?
A. The limit is 10 months from the
date of purchase Except that clay
away" purchases are dated when the
goods are taken home).
Q. How much down payment is re-
quired?
A. 33 1-3 per cent on automobiles,
airplanes, power boats, boat motors,
motorcycles; 20 per cent on mechanic
al refrigerators, washing machines,
ironers, suction cleaners, cooking
stoves and ranges, heating stoves
and space heaters, electric dishwash-
ers, room air-conditioners, sewing ma
chimes, radios and musical instru-
ments made principally of metal; Is
per cent on furnaces and heating
units for furnaces (including oil
burners, gas conversion burners and
stokers, water heaters, water pumps,
plumbing and sanitary fixtures, home
air conditioning systems, attic ventil-
ating fans: 10 per cent on furniture,
pianos and electric organs,)
House Construction Exempted
Q. Do the rules apply to the cost
of labor and materials for repairing
or improving a home?
A. Yes if the cost is under 81 1000.
No down payment is required, but
the loan must be paid off in Is
months. Transactions involving a
complete house are exempt.
Q. Are cash loans restricted?
A. Yes, if the loan is under 81, 900
and is to be repaid in installments.
Eighteen months is the limit.
Q. Are farm implements involved?
A. No. Nothing which was not
named specifically above is affected.
Furthermore, cash loans for farmers
to be used in the business of farm
ing are also exempt
@. Does the furniture restriction
cover such things as curtains?
A. No Furniture" includes ice
boxes, bed springs, and mattresses.
@. Can a university student still
borrow money for his education with
out the restrictions?
A. Yes, loans to students are spe-
officially exempted.
O. What provision is made for a
family that may have to borrow
money to pay emergency expenses :?
A. Exemption is made on loans to
pay medical, dental, hospital or fu-
neral expenses if the borrower can
show the limitations would work a
hardship.
O. What do the rules say about
past installment contracts, partic-
ularly if consumer buys more after
Monday and wants to consolidate the
two debts?
A. Old debts are not affected, ex-
cept that after Nov. l an old debt
consolidated with a new, or an old
debt renewed or extended will come
under the rules.
@. Are the sizes of installment pay
ments regulated?
A. Yes. They must be of approx
mately equal size and spaced not
more than a month apart Except in
minor cases.. Also, after Jan. l, the
minimum monthly payment will be S..
Q. What will happen to a store that
violates these rules?
A. It's license to give installment
credit Everybody gets a license au-
tomatically to begin With may be re
voked or suspended. Then, if some
one is caught giving installment
credit without license he may be
prosecuted under a World war law
which has maximum penalties of 10
years in prison and fine of 100000
Q. Are these rules permanent?
A. No. They are subject to change
at any time.