As we continue to see increased focus and closings of commercial real estate ("CRE") loans in an attempt to increase yields within the financial institution industry, what will be the fallout from the regulators? The regulators issued a warning through a joint statement in December 2015 regarding the "substantial rise in CRE exposure" similar to the warning sent in December 2006. The regulators are scared and want to be sure that all Banks housing are in order in this rising rate environment. But the Banks are not biting and continue to drive CRE growth due to the improving credit quality and declining delinquencies. For more information or assistance please contact James Dowling, Manager, and member of Marcum's Financial Institutions Industry Group.
See attached article entitled "Most Banks are Shrugging off Regulators' CRE Warnings" written by Kristin Broughton of American Banker for more information.