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The OCC, FRB, and FDIC issued a proposed rule to implement section 214 of the EGRRCPA, which provides that, effective upon enactment, the agencies may require a depository institution to assign a heightened risk weight to a high volatility commercial real estate exposure only if such exposure is a High Volatility Commercial Real Estate Exposure (HVCRE) ADC Loan, as defined in section 214.  Because the statutory definition of HVCRE ADC Loan set forth in the EGRRPCPA is narrower than the current regulatory definition of HVCRE exposure, the Federal banking agencies intend to revise their rules to make them consistent with section 214 and to clarify the meaning of certain terms referenced in the definition of HVCRE ADC Loan.

In addition, the OCC, FRB, and FDIC have approved a second notice of proposed rulemaking to request additional comment on the treatment of loans that finance the development of land under the one- to four-family residential properties exclusion in the definition of HVCRE exposure in the agencies’ regulatory capital rule.