Regulatory Alerts2021-10-27 | 2021-23381Real Estate Lending Standards
The Federal Deposit Insurance Corporation issued a final rule amending its Real Estate Lending Standards to incorporate the Community Bank Leverage Ratio framework. The amendment establishes a consistent methodology for calculating loans exceeding supervisory loan-to-value limits by using tier 1 capital plus allowance for credit losses, thereby eliminating the requirement to compute total or tier 2 capital. Applicable to all FDIC-supervised institutions, the rule preserves historical safety-and-soundness thresholds while reducing regulatory burden and preventing compliance disruptions for banks transitioning between capital frameworks.
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