Banks May Extend and Maintain Purpose Credit Without Complying with Regulation

question 399

Multiple Choice

Banks may extend and maintain purpose credit without complying with Regulation U if the credit is extended:

• A) To a bank auditor
• B) To a qualified employee stock ownership plan running previously but not now
• C) To any customer, other than a broker or dealer, to temporarily finance the purchase or sale of securities for prompt delivery, if the credit is to be repaid in the ordinary course of business on the completion of the transaction
• D) To enable a customer to meet emergency expenses not reasonably foreseen and if the bank obtains a good faith statement from the customer. Emergency expenses are ones related to unforeseen death or disability, not a chance to make a profit.

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Definitions:

Output Power

The amount of power (in watts) delivered by a system to its load, representative of the system's output performance.

Three-Phase Bank

Single-phase transformers connected in such a way as to operate on a three-phase system.

Single-Phase Transformers

Transformers designed to operate on an AC power supply of single phase, meant for transferring electrical energy between circuits.

Transformation

A thorough or dramatic change in form or appearance, often used in reference to energy conversion processes.