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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.
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