OCC BULLETIN 2015-51
Subject: Real Estate Lending
Date: December 18, 2015
To: Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
Description: Interagency Statement on Prudent Risk Management for Commercial Real Estate Lending
The Office of the Comptroller of the Currency (OCC), along with the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, is issuing the attached interagency statement regarding supervisory findings about commercial real estate (CRE) lending activities. The agencies have observed substantial growth in many markets, increased competitive pressures, rising concentrations, and an easing of underwriting standards. The interagency statement reminds financial institutions of existing regulatory guidance on prudent risk management practices for CRE lending activity through economic cycles.
The interagency statement reminds financial institutions
The agencies have observed the following recent trends:
Historical evidence demonstrates that financial institutions with weak risk management and high CRE credit concentrations are exposed to a greater risk of loss and failure. Maintaining underwriting discipline and exercising prudent risk management practices can help institutions succeed during difficult economic cycles.
Please contact Grant Wilson, Director for Commercial Credit Risk, at (202) 649-6670.
Jennifer C. Kelly