A regulation that would have increased the levels of banks’ capital requirements and changed the way banks handle defaulted commercial real estate loans will not be going into effect – at least not as it is currently written.

The regulation is a proposal from the Fed, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency unveiled last July that is tied to Basel III, an international overhaul of capital standards that began more than a decade ago. Representatives from the financial and commercial real estate industry have spoken out about it, with advocates going so far as to air TV commercials against it during football games. And Bob Broeksmit, CEO and president of the Mortgage Bankers Association has said it “could be the end of bank real-estate finance as we know it.”

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Erika Morphy


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