Highlights:
- The agencies are concerned that rising CRE concentrations may expose institutions to unanticipated earnings and capital volatility in the event of adverse changes in the general commercial real estate market.
- The attached guidance addresses sound risk management practices for concentrations in CRE lending. It reinforces existing regulations and guidelines for real estate lending and safety and soundness.
- The guidance provides supervisory criteria, including numerical indicators, for identifying institutions with potentially significant CRE loan concentrations that may warrant greater supervisory scrutiny.
- The guidance is not intended to limit banks' CRE lending, as the agencies recognize that banks serve a vital role in their communities by supplying credit for business and real estate development.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Chief Loan Officer
Compliance Officer
Related Topic:
Real Estate Lending Standards
Attachment:
Joint Guidance
Contact:
Senior Examination Specialist Patricia A. Colohan
at Pcolohan@fdic.gov or (202) 898-7283
Printable Format:
FIL-104-2006 - PDF 36k (PDF Help)
Note:
FDIC financial institution letters (FILs) may be
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www.fdic.gov/news/news/financial/2006/index.html.
To receive FILs electronically, please visit
http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters
may be obtained from the FDIC's Public Information
Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1-877-275-3342 or 703-562-2200).
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