Banks Too Concentrated in CRE?

National banks are too heavily concentrated in commercial real estate, including acquisition, development, and construction loans with homebuilders and developers, a government official warned at the Consumer Bankers Association's annual Home Equity Lending Conference in Austin, Texas. Timothy Long of the Office of the Comptroller of the Currency said nearly 400 of the banks his agency regulates have 100% or more of their capital invested in this type of financing. "And we're not talking 105% or 100%," he said, "we're talking 300%, 400%, and 500%." Mr. Long also said that some 700 state-chartered banks that are overseen at the state level are in the same predicament. "These are some big numbers, and they are cause for concern," the senior deputy comptroller said. "We've never gone into a significant downturn with this kind of concentration, but we've got it now."