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FEDERAL R E SE R V E BANK
OF NEW YORK
r Circular N o. 3 6 1 6 1
L Novem ber 16, 1950 J

R E G U LA TIO N X
R E SID E N T IA L R E A L E STA TE C R ED IT

To all Persons Engaged in the Business o f Extending Real Estate Credit
in the Second Federal Reserve D istrict:

A s a result of questions which have been raised, the Board of Governors of the Federal
Reserve System has advised us as to methods o f compliance with the provisions o f the first
sentence of section 4(c) of Regulation X requiring that no Registrant shall extend any credit
unless he is satisfied, and maintains records which reasonably demonstrate on their face,
whether such credit is or is not real estate construction credit.
I f the Registrant is satisfied that the credit is not real estate construction credit, the
provisions of this sentence may be met by the retention by the bank or other lender o f any of
the follow ing:
(1) A statement o f the borrower, on a form substantially similar to the specimen form
sent to you on October 16,1950 with our Circular No. 3604 or contained in a loan application
or any letter or other writing, which is signed by the borrower and states the facts indicated
in the second sentence o f section 4 ( c ) ;
(2) Correspondence, memoranda, loan applications or other documents of any kind,
whether or not originating in connection with the credit in question, which on the basis o f a
reasonable interpretation show that the credit is not real estate construction credit; or
(3) A written endorsement or rubber stamp legend, placed upon the credit instrument
or upon other papers in connection with the credit and signed by the Registrant or a
responsible officer of the Registrant, stating that he is satisfied that the credit in question
is not real estate construction credit.
Additional copies of this circular will be furnished upon request.




A

llan

S proul,

President.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102