Under Regulation U, prior to extending credit secured by margin stock for more than $100,000, a national bank must obtain which of the following?
Under Regulation U, prior to extending credit secured by margin stock for more than $100,000, a national bank must obtain which of the following?
Prior to extending credit secured by margin stock for more than $100,000, a national bank must obtain a written statement from the borrower as to the purpose of the loan. This requirement helps ensure compliance with the restrictions on the amount of credit that can be extended for the purpose of buying or carrying margin stock under Regulation U.
Under Regulation U, which governs the extension of credit by banks for the purpose of buying or carrying margin stock, a key requirement is for the lender (in this case, a national bank) to obtain a written statement from the borrower detailing the purpose of the loan. This requirement is crucial because Regulation U places restrictions on the amount of credit that can be extended for the purpose of buying or carrying margin stock, and the purpose statement helps ensure compliance with these restrictions.