Bank CRE Loan Concentration Risks Prompting Increased Regulator Scrutiny

Several Hundred Banks Could Exceed Federal Regulators Ratio Guidance

By; Mark Heschmeyer

Federal banking regulators are closely monitoring real estate loan performance as banks have stepped up their commercial real estate and multifamily lending in the last several years. After another quarter this year of strong growth, many analysts also are beginning to believe risk related to CRE lending has also increased.

Last December, federal banking regulators put banks on notice that they were going to be taking a closer look at CRE loan concentrations. Despite that, banks continued to pump up their CRE lending in the first quarter buoyed by continued strong property fundamentals.[Read More]

Source: CoStar