Regulatory Alerts2019-07-23 | 2019-15332Added · Updated
Regulatory Capital Rules: Treatment of Land Development Loans for the Definition of High Volatility Commercial Real Estate Exposure
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation propose to revise the definition of high volatility commercial real estate exposure to exclude land development loans from the one- to four-family residential properties exclusion. The agencies determine that credit facilities solely financing land development activities, such as laying sewers or water pipes without residential construction, present elevated risks and should remain subject to heightened risk weights. This proposal seeks public comment on aligning regulatory capital treatment with supervisory standards and reporting instructions for these specific loan types.