Borrowers can get better rates elsewhere, so they're repaying ahead of schedule, leaving banks in the lurch. The steps lenders would have to take to keep the business could be prohibitively expensive.
The New York bank said it wrote down each taxi medallion loan to a value of $160,000. At their peak, New York City medallions were worth well over $1 million.
Bankers hoped the tax overhaul would stimulate a boom in business borrowing, but several said this week that hasn’t happened yet. PNC’s Bill Demchak warned that the tax cuts could be encouraging lenders to underprice loans.
TriStar Bank in Tennessee says a shortage of appraisers is slowing down its commercial real estate lending and raising the cost of appraisals. The claim has outraged appraisers, who argue that the bank is simply trying to avoid paying their fees.
As part of a larger regulatory relief effort, regulators have raised the dollar-amount threshold for commercial real estate transactions that require a formal appraisal.
The bank, which has branches in eight state and operates a nationwide real estate business, said that the proposed new name, Bank OZK, would better reflect its geographic reach.
First the House and now the Senate have included provisions in their regulatory relief bills that bankers say would go a long way toward clearing up confusion over how to treat high-volatility commercial real estate loans.
