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.
In some cases, supervisors, after more careful review, may actually find that given the characteristics of its CRE portfolio, an institution has sound risk management and is holding appropriate capital. In general, the proposed guidance is intended to be applied quite flexibly and in a manner consistent with the size and complexity of each organization.