FDIC – Proposed Rule – Amend the Interagency Guidelines for Real Estate Lending Policies

June 15, 2021 – Would amend real estate lending standards set forth under Appendix A of 12 CFR 365. To conform ratio of loans in excess of supervisory loan-to-value (LTV) limits calculation with the capital framework in community bank leverage ratio (CBLR) rule.

Proposed Real Estate Lending Standards
Established supervisory LTV criteria for various real estate lending transaction types. Allows exceptions to the supervisory LTV limits, measured against total capital. Qualifying community banking organizations that elect CBLR framework not required to calculate/report total capital as defined in capital rules, including Tier 1 and Tier 2 capital.

Revised appendix so all FDIC institutions calculate loan ratio in excess of supervisory LTV Limits using Tier 1 capital plus the proper allowance for credit losses in the denominator. Would be calculated as described regardless of an institution’s CBLR election status. For the consistent approach to calculating the ratio of loans in excess of supervisory LTV limits. Approximates historical method in calculating the ratio of loans exceeding supervisory LTV.

Effectiveness
Comments must be submitted 30 days after publication in the Federal Register.

For more information, visit www.fdic.gov.

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