The increasing concentration of construction loans in community bank portfolios is raising regulators' eyebrows.

Last week the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., and the Office of Thrift Supervision all expressed concern about the rapid pace of construction lending at community banks and thrifts. Though none urged community banks to scale back, each cautioned about the risks in a line of business that even many large banks have curtailed.

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