Economy Watch: U.S. Official Talks of CRE Froth
By
Thomas Curry, U.S. Comptroller of the Currency
U.S. Comptroller of the Currency Thomas Curry, part of whose job is to oversee banking regulations, recently told the Reuters Financial Regulation Summit in Washington, D.C., that credit risk is growing for certain banks with CRE loans in certain markets. In particular, lenders are exposed to “froth” in apartment markets in New York, Boston, Washington D.C., and San Francisco, he asserted.
The Office of the Comptroller is pressing banks to tighten up loan terms to property developers, and toward that end, recently reissued its guidance on how banks should approach CRE lending. The guidance, issued along with the FDIC and the Fed, warned financial institutions that there will be a renewed focus by regulators in 2016 on the concentration risk in commercial real estate lending…
