Comment Period Extended
Federal banking regulators have agreed to extend the 30-day comment period on two proposed guidances pertaining to commercial real estate lending.
The proposals pertain to final rules for banks that deal with high concentrations of real estate loans. Proposed regulations would require these types of banks to maintain “heightened risk management” programs for making and managing these types of loans.
For example one proposal states that if a bank has total real estate loans for construction, land development and other land purchases totaling 100% or more of risk-based capital, that bank would be considered to have a high-concentration of loans. They would then need to implement safeguards to manage these types of loans.
The other proposal indicates that banks would be more highly scruitinized if its combined volume of construction and development loans, and loans to owners of existing commercial properties exceeded 300% of risk-based capital.
Comment letters will be accepted through April 13th instead of the current March 14th date.