Officials of the American Bankers Association, the Saving & Community Bankers of America and the Association of Bank Holding Companies wrote the four federal depository regulatory agencies to urge that when the regulators adopt real estate lending standards under the Federal Deposit Insurance Corporation Improvement Act, they permit financial institutions to set standards and policies appropriate to each institution's operation. They argued against establishing specific uniform maximum standards. The agencies, however, ignored the advice and set specific loan-to-value ratios. (See story on Page 1.) Following is the comment letter.

We express our strong concern regarding adoption, pursuant to Section 304 of the Federal Deposit Insurance Corporation Improvement Act, of real estate lending standards that apply uniformly to all depository institutions. Inclusion in such a regulation of detailed loan-to-value ratio limits would have a negative effect on the nation's economy and all aspects of the development, financing, construction and the sale of residential and commercial real estate.

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