Risks in Underwriting Practices Stabilized But Caution Still Necessary, FDIC Reports
Examiners say that the overall potential risk associated with current underwriting practices at FDIC-supervised banks decreased slightly. However, examiners also report that risky underwriting practices for agricultural, construction and commercial real estate lending remain causes for concern, according to the agency's latest Report on Underwriting Practices, which covers the six months ending March 31, 2000.
"These results signal yellow-caution," FDIC Chairman Donna Tanoue said. "While we are pleased that some underwriting practices appear to have stabilized, we are urging bankers to take a closer look at financial statements and sources of repayment."
[Follow the link -- http://www.fdic.gov/bank/analytical/report/2000mar/index.pdf -- for the full survey in Adobe Acrobat format. The report may not be available online until Tuesday morning]