Question
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Mr. Dana Abrahamsen
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washing ton, D.C. 20580
Re: Section 7A(c)(2) Exemptions Under the Hart-Scott-Rodino Antitrust Improvements Act (the Act)
Dear Mr. Abrahamsen:
This letter will confirm our conversation of today in which we discussed the application of the Acts Section 7A(c)(2) exemptions to the acquisition of consumer finance account receivables exceeding $15,000,000 secured exclusively by real estate mortgages or deeds of trust. In the transaction contemplated, the assets being acquired represent less than 5% of the sellers deeds of trust and a division or separate entity of the seller is not being acquired.
There are no Rules which specifically address the exemption of bonds, mortgages, deeds of trust, or other obligations which are not voting securities under Section 7A(c)(2) of the Act. We are limited to the usual and customary definitions of those terms and the legislative history of the Act to determine the Congressional intent. Senator Hart gave the clearest indication when he stated that it was the intention of the managers that this provision exempts consumer receivables and loans or other obligations which are not voting securities, which are traditional financing arrangements and which normally are sold to banks and other financing agencies and acquired in the normal course of business.
You concurred that acquisition of mortgage or deed of trust secured consumer finance receivables as described in the first paragraph above would be exempt under Section 7A(c)(2) from the pre-merger notification filing and waiting period (s) of the Act.
If I have omitted or misstated any material portion of our conversation, please advise as we are relying on this interpretation to proceed with the transaction. If this letter confirms with you understanding of our conversation, please return to me an FTC file-stamped copy of the duplicate of this letter in the Federal Express envelope provided.
Thank you very much for your assistance in this matter.
Very truly yours,
(redacted)
cc: (redacted)