Regulation X - Definition
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Regulation X Definition
There are two recognized regulations, each known as Regulation X. Regulation X is a US Federal Reserve Bank regulation that governs the extension of credit to foreign persons or organizations to purchase US Treasury Securities. It does not apply to individuals who both claim permanent residency outside of the US and have purpose credit over $100,000. A different Regulation X is promulgated by the Bureau of Consumer Financial Protection. It regulates the process of applying for a federally-regulated mortgage. A Little More on What is Regulation XFederal Reserve Regulation X Regulation X was promulgated in furtherance of the Securities Exchange Act of 1934. It primarily applies when foreign countries purchase US Treasury Securities. It seeks to make certain foreign actors do not purchase these securities in credit without the capital to support the purchase. The provisions are similar to those of Regulation T, which limits credit financing to 50% of the value of the security. Regulation T also regulates credit limits applicable to brokers and dealers. Regulation T also regulates credit limits applicable to banks and lenders. A foreign person or organization will still be subject to regulation under these regulations as well.
Bureau of Consumer Financial Protection Regulation X
Regulation X was promulgated as part of the Real Estate Settlement Procedures Act of 1974. The regulation requires specific disclosures by the regulated entity to consumers applying for mortgages or other secured loans.
References for Regulation X