Certified Regulatory Compliance Manager (CRCM) — Question 115

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?

Answer options

• A. Certificate of value for the collateral
• B. Written statement from the borrower as to the purpose of the loan
• C. Written statement certifying the borrower's business address and daytime phone number
• D. Notice from the borrower as to his willingness to provide additional margin stock as collateral

Correct answer: B

Explanation

The correct answer is B because Regulation U requires a written statement from the borrower detailing the purpose of the loan for amounts over $100,000. The other options, while potentially useful, do not meet the specific regulatory requirements set forth in Regulation U.