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H.R. 10553House119th Congress (2025-2027)In Committee

Margin Eligibility Modernization Act

Sponsored by Andrew R. GarbarinoRep. Andrew R. Garbarino (R-NY)
Introduced September 24, 2026

AI-Generated Summary

Updated September 28, 2026 at 12:52 PM UTC

The Margin Eligibility Modernization Act directs the Federal Reserve’s Board of Governors to broaden the definition of an “OTC margin stock” in Regulation T to cover any over‑the‑counter equity security that has a ready market. The change would allow brokers to extend margin credit on a wider range of OTC equities. The bill also sets a deadline for the rule and requires a five‑year impact report to Congress.

Key Provisions

  • Within 90 days of enactment, the Fed must issue a rule amending Regulation T to include any OTC‑traded equity with a ready market in the definition of “OTC margin stock.”
  • If the Fed fails to issue the rule within 90 days, the expanded definition automatically takes effect during that period.
  • Five years after the rule is issued, the Fed must report to the House Financial Services Committee and the Senate Banking Committee on the amount of credit extended under the new definition and any related risks to the financial system.

Legislative Activity

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1 earlier action
HouseIntro Referral Latest Action

Referred to the House Committee on Financial Services.

Financial Services Committee

September 24, 2026

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HouseIntro Referral

Introduced in House

September 24, 2026

HouseIntro Referral

Referred to the House Committee on Financial Services.

Financial Services Committee

September 24, 2026

Bill Text

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Introduced in HouseIssued September 24, 2026

I

119th CONGRESS

2d Session

H. R. 10553

IN THE HOUSE OF REPRESENTATIVES

September 24, 2026

Mr. Garbarino introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To require the Board of Governors of the Federal Reserve System to amend Regulation T to include in the definition of an OTC margin stock certain equity securities for which there is a ready market, and for other purposes.

1.

Short title

This Act may be cited as the Margin Eligibility Modernization Act.

2.

OTC margin stock rulemaking

(a)

In general

Not later than 90 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System shall issue a rule to amend section 220.2 of title 12, Code of Federal Regulations, to revise the definition of OTC margin stock to include any equity security traded over the counter for which there is a ready market, as defined in section 240.15c3–1(c)(11) of title 17, Code of Federal Regulations.

(b)

Effect of failure To issue rule

If the Board of Governors of the Federal Reserve System does not issue the rule required under subsection (a) before the end of the 90-day period described in subsection (a), until such rule is issued, the definition of OTC margin stock under section 220.2 of title 12, Code of Federal Regulations, is deemed to include any equity security traded over the counter for which there is a ready market, as defined in section 240.15c3–1(c)(11) of title 17, Code of Federal Regulations.

(c)

Report to Congress

At the end of the 5-year period beginning on the date the rule required under subsection (a) is issued, the Board of Governors of the Federal Reserve System shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report assessing the credit extended by reason of such rule and any associated risks to the financial system.