Several members of Congress are making their strongest suggestions yet for regulators to ease their proposed guidelines on banks’ commercial real estate lending. That congressional concern could prompt regulators to make some “significant changes” when they issue final guidelines, said Mark Tenhundfeld, director of the Office of Regulatory Policy at the Washington, D.C.-based American Bankers Association. That could include more clearly applying any new requirements on a case-by-case basis, rather than banks in general, he said.

The proposals would make banks subject to extra scrutiny and possible orders to raise more capital or improve underwriting, if they exceed two ratios on real estate loans to capital. The percentage of South Florida-based banks above the threshold for a proposal on construction loans is more than double the percentage of banks nationwide in that category. Rep. Spencer Bachus, R-Ala., chairman of the Subcommittee on Financial Institutions, said at the hearing that he fears the proposals “may cause banks to shift lending patterns to what the regulator wants instead of what the market dictates.” “I’m not sure the government should be in the business of telling a bank where it ought to lend money,” he said.

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