Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices

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The OCC, Board, FDIC, and OTS (the Agencies), request comment on this proposed guidance entitled, Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices (Guidance). The Agencies have observed that some institutions have high and increasing concentrations of commercial real estate loans on their balance sheets and are concerned that these concentrations may make the institutions more vulnerable to cyclical commercial real estate markets. This proposed Guidance helps identify institutions with commercial real estate loan concentrations that may be subject to greater supervisory scrutiny. As provided in the proposed Guidance, such institutions should have in place risk management practices and capital levels appropriate to the risk associated with these concentrations.