SEC Wants Some Banks to Disclose More on Commercial Real-Estate Exposure

The Securities and Exchange Commission is questioning some community and regional banks about their exposure to commercial real estate in their loan portfolios, as potential losses on the loans could spur them to further cut lending. 

The SEC released four letter exchanges in the past week or so in which it questioned smaller financial firms about their CRE exposure in loan portfolios. The SEC last year sent letters to banks to request more clarity in their disclosures around the potential consequences from the failures of First Republic Bank, Silicon Valley Bank and Signature Bank.

Banks are falling under the regulator’s spotlight increasingly around the effects of the CRE credit crunch, which threatens to trigger failure for banks highly concentrated in property debt.

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