The FDIC is seeking comment on a proposed amendment to align the agency's Guidelines for Real Estate Lending Policies ("Real Estate Lending Standards") with the October 2020 revised community bank leverage ratio ("CBLR") rule. The CBLR does not require that electing institutions calculate tier 2 capital or total capital.
The proposed amendment would allow qualifying community banking organizations and other insured financial institutions to calculate the ratio of loans that exceed the supervisory loan-to-value limits ("LTV Limits") "using tier 1 capital plus the appropriate allowance for credit losses in the denominator." Without increasing the regulatory burden for such institutions, including those that decided to switch between the CBLR framework and generally applicable capital rules, the proposed amendment would estimate the historical methodology outlined in the Real Estate Lending Standards for the calculation of loans in excess of the supervisory LTV Limits.
Comments on the proposal must be received within 30 days of its publication in the Federal Register.
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