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RICHMOND, VA-As the latest news from the Treasury Department makes clear, US financial institutions are still struggling with the after-effects of the real estate crash and deep recession. For the most part, the largest money banks have regained their equilibrium and in fact are posting profits. Second and third tier institutions, however, are not nearly in such good standing.

The bad news is that regulators are stepping up their scrutiny of all banks, healthy or not, to make sure their exposure to commercial real estate is within strict guidelines. The good news is that it appears they are willing to take a flexible approach. At least five local institutions have agreed to a memorandum of understanding with the FDIC and the Virginia Bureau of Financial Institutions, the latest being Midlothian, VA-based Village Bank, according to Richmond Biz Sense.

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