Credit Curb

Within an hour after President Truman signed the Defense Production Act last week (see NATIONAL AFFAIRS), the Board of Governors of the Federal Reserve System clamped down on consumer credit. But the board thoughtfully gave everyone plenty of time to stock up. Not until Sept. 18 will the ban go down on easy credit of "nothing down, three years to pay," which some retailers are offering.

The new rules:

P: For new & used automobiles, a minimum down payment of one-third and maximum of 21 months to pay the balance.

P:For other consumer durables (washing machines, refrigerators, radio & TV sets, etc.), 15% down, 18 months to pay.

P:For household furniture, 10% down, 18 months to pay.

P:For materials to repair or remodel homes, 10% down and 30 months to pay.

While the curbs of the new Regulation W are slightly tighter than the credit controls which expired in June 1949, they are much looser than World War II regulations. They do not apply to charge accounts, and purchases under $100 are exempted from down-payment restrictions (but subject to the payoff regulations).

Among the hardest hit will probably be used-car dealers, already feeling a slump in sales. Warned the Reserve Board: the regulation will be tightened "if conditions warrant."

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