A recent proposal by the National Credit Union Administration (NCUA) to raise the threshold at which credit unions must obtain appraisals for commercial real estate (CRE) transactions from $250,000 to $1 million would create an unlevel playing field between banks and credit unions, the American Bankers Association (ABA) said in a comment letter to the NCUA today.
The letter was also shared with members of the Federal Financial Institutions Examination Council.
ABA noted that the proposal would “[put] NCUA’s regulatory treatment of credit unions dramatically out-of-step with its sister agencies,” which earlier this year raised the CRE appraisal threshold for banks from $250,000 to $500,000.
ABA stated that it "does not oppose credit unions enjoying the benefit of an increased $500,000 threshold that aligns" with standards recently adopted by other federal banking regulators.
“Two different standards for commercial real estate lending appraisal thresholds or any other real estate lending thresholds, made by what are functionally equivalent lending institutions, would negatively impact prudent risk management practices and undermine local markets,” ABA said. It added that “FFIEC and all participating agencies should uniformly agree to abide by consistent standards, rulemaking and thresholds that are now in jeopardy as a result of this proposal.”
Read ABA's letter.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment