Regulatory Alerts2016-01-11
SBD Opinion No. 2015-1 Policy on Booking and Holding Real Property Interests
The Alabama State Banking Department issued SBD Opinion No. 2015-1 to update regulations for state-chartered banks regarding the acquisition, valuation, and holding of real property interests acquired for debts previously contracted. The policy mandates that banks write down the book value of such interests to one dollar after five years unless they obtain Superintendent approval for an extended holding period based on current appraisals and marketing documentation. Additionally, the revised guidelines permit limited write-ups of property values under specific conditions while prohibiting capitalization of maintenance expenses and requiring strict adherence to safety and soundness standards for special purpose entities.
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