The sharp growth in commercial real estate lending at U.S. banks (especially construction and land development loans) and increased reliance on noncore funding sources pose heightened risks to the banking industry, according to a report by A.M. Best Co., Oldwick, N.J.The weakening consumer credit market has prompted banks to boost commercial real estate lending to offset the slowdown, the report says. The banking industry's assets grew twice as fast as deposits (based on third-quarter 2006 regulatory data), while CRE loans grew three times as fast and C&D loans grew more than five times as fast, according to A.M. Best. "As of the end of the third quarter, CRE stood at a record 14.2% of total assets, which makes these trends particularly distressing," the company said. A.M. Best can be found online at http://www.ambest.com.
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A federal judge in Texas dismissed the Consumer Financial Protection Bureau's medical debt rule and prohibited states from passing their own laws prohibiting medical debt on credit reports.
July 11 -
Dr. Mark Calabria takes on the additional role of chief statistician of the United States; retired Ally Bank executive Diane Morais has joined First Citizens Bancshares' board of directors; MainStreet Bank has promoted Alex Vari to chief financial officer; and more in this week's banking news roundup.
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While refinances are behind the latest increases, the pace of purchase activity may be a stronger indicator of where the housing market sits.
July 11 -
The share of economists expecting a September rate reduction grew in the July Wolters Kluwer survey, but the October or later percentage also increased.
July 11 -
Rising home prices and softening sales offer a mixed view of a market that some say is shifting to favor buyers.
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The notes are backed by home improvement installment loans originated by approved dealers in Foundation Finance Company's network.
July 11