Furthermore, no element of the proposed guidance is intended to act as a "trigger" or "hard limit" for immediate cutback or reversal of CRE lending; rather, it should be viewed as a reminder to institutions that certain risk management standards are vitally important for banks involved in the business.
Additionally, if the agencies finalize the proposed guidance, they intend to use the proposed thresholds in the guidance only as a "first cut" or "screen" to identify institutions that may have heightened CRE concentration risk. The thresholds are intended to serve as benchmarks to identify cases for further review.