WASHINGTON, DC-The Federal Deposit Insurance Corp. has published the final rules for the stress testing required by the Dodd-Frank Act. For institutions with assets greater than $50 billion, the law goes into force this year. Institutions with assets between $10 billion and $50 billion can wait until October 2013. The FDIC Board also approved a final rule that amends the definitions used to identify concentrations in higher-risk assets to better reflect the risk posed to institutions and the FDIC.

Certainly lending by commercial banks to commercial real estate projects has been subdued since the crash, although it has been improving. The most recent Senior Loan Officer Opinion Survey on Bank Lending Practices by the Federal Reserve Bank noted that “a modest fraction of domestic banks, on balance, reported having eased standards on CRE loans over the past three months, while a relatively sizable fraction, on net, continued to indicate having experienced stronger demand for such loans.”

Despite—or indeed, because of—the lackluster bank lending environment, the stress test requirements will be of key interest to the commercial real estate industry. Conduit lending is barely emerging, leaving many borrowers to rely on banks’ balance sheet lending programs. That lifeline, though, may be scaled back with these tests. “I think the new rules will force a number of regional and global banks to reconsider how they offer balance sheet fundings—as in fewer will do them,” Lawrence J. Selevan, CEO of Chesterfield Faring Ltd., tells GlobeSt.com. Instead, he predicts, more banks will try to tap the conduit market or agency securitizations via separate subsidiaries. “The largest impact will be on small community banks that will find it more difficult to make small commercial loans.” These, he says, will likely be transferred to the government’s SBA lending programs.

FDIC’s newly-released stress test rules revised the notice of proposed rulemaking published in the Federal Register on Jan. 23, 2012. The FDIC reviewed a number of public comments, and coordinated with the Federal Reserve Board and the Office of the Comptroller of the Currency to write the final regulations.