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

(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.