The FDIC adopted amendments that will incorporate the October 2020 revised community bank leverage ratio rule with the Interagency Guidelines for Real Estate Lending Policies.

As previously covered, the amendments will allow qualifying community banking organizations and other insured financial institutions to calculate the ratio of loans that exceed the supervisory loan-to-value limits "using tier 1 capital plus the appropriate allowance for credit losses in the denominator."

The FDIC stated that the amendments were adopted without any changes from the June 2021 proposal and will go into effect 30 days after their publication in the Federal Register.

Primary Sources

  1. FIL-71-2021 - Final Rulemaking to Amend the Real Estate Lending Standards
  2. FDIC Final Rule: Real Estate Lending Standards

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.