Tearing down barriers erected after the 1929 stock
Effective April 1, banks may lend up to 100% of the purchase price of
Not affected by the change are equities traded on major exchanges, such
A federal law prevents banks from financing more than half the purchase
"This is consistent with where the Fed has been heading," said Gil
"They want to be very flexible on the margin requirements. They can't
The Fed also gave banks permission to lend up to half the purchase price
Currently, banks may not lend any portion of the purchase price of these
The changes also affect broker-dealers, such as securities firms and
They will be allowed to extend credit for up to half the purchase price
Currently, they may not lend any money toward the purchase of most of
Also, broker-dealers may lend up to 100% of the purchase price of debt
Banks have always had this authority, but broker-dealers were subject to
Finally, the agency clarified a 1996 law that exempted bank loans to
Broker-dealers are exempt if they have more than 1,000 active customers,
The Fed noted that its changes do not affect margin requirements imposed
But officials noted that, historically, these other regulators adjust
In a related proposal, the Fed asked for comment about other changes it
For instance, the Fed asked if it should expand an exemption on loans to
Comments are due April 1.