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FDIC Federal Register Citations
From: L. Newton [mailto:lnewton@floridabankers.com] 
Sent: Tuesday, March 07, 2006 2:28 PM
To: Feldman, Robert
Subject: Proposed Guidance for Commercial Real Estate Lending

L. Newton
1001 Thomasville Rd, Suite 201
Tallahasse, FL 32303-6267


March 7, 2006

Bob Feldman
 
Dear Bob Feldman:

I write because I think it important to comment on the Guidance being 
proposed with respect to commercial real estate lending.  Commercial real 
estate lending is an extremely important part of the economy in Florida 
and like wise it is extremely important part of bank lending. 
 
I understand the need for sound lending and sound loan portfolios.  I have 
concerns, however, that the Guidance as announced will have a negative 
overall effect on my institution and the economy as a whole.
 
My concerns are not so much with the individual practices set out in the 
Guidance, but rather with the way the Guidance is imposed.  We have had 
experience in which examiners impose even existing regulations differently 
than they previously had done.  The proposed Guidance contains certain 
thresholds and a laundry list of practices and requirements.  I am 
concerned that the rules of the game have suddenly changed. 
 
Specifically there are several points we would like for the Guidance to 
make clear.  First, that in looking at concentrations there will not be a 
one size fits all response.  Each of our institutions has a different 
history, different controls, different portfolios, and different markets.  
When those in the field determine there is a concentration any response 
needs to be tailored for the specific circumstances. 
 
Second, we hope the Guidance will make it very clear that if the 
concentration thresholds are exceeded it does not automatically require a 
capital increase.  Any increase should be in the context of the 
circumstances of the particular institution.
 
Third, the Guidance should expressly indicate that its purpose is not to 
discourage commercial real estate lending.
 
If the Guidance is imposed in a mechanical or arbitrary manner or if it is 
intended to effect a policy shift discouraging commercial real estate 
lending then I fear grave consequences.    Secured real estate lending has 
been the bread and butter of banks in Florida.  If such loans are not 
available then will we have to look to other types of credits which 
historically have been more risky?
 
Perhaps most important, if the message is perceived to be that commercial 
real estate lending has great regulatory risk, then such loans will 
significantly diminish.  This will lead to a downturn in our economy that 
will create systemic problems for banks far beyond the risk of commercial 
real estate loans.
 
I thank you for your consideration of these concerns and comments and hope 
that the final Guidance will address them in a meaningful way

Sincerely,


L. Newton



Last Updated 03/08/2006 Regs@fdic.gov

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