Community banks have been the way local development has gotten done, it is that simple. They are motivated to improve the local infrastructure of a community and develop it. They also know the risks of the region and can manage them. Now that is not to say some of these local banks do not make mistakes, they do.

But the Federal government is proposing new regulations on lending practices that may hamper the ability off small local banks to make real estate loans for real estate and development. The sceptic in me wonders if this is driven by the big banks with their lobbyists wanting to drive these developers to them, with their bloated fees and different incentives.

But that is just me talking.

It’s not a major concern yet, but you’re beginning to hear conversations that it’s getting harder” to arrange bank financing for real estate, said Tony Landrum, developer of The Tower high-rise condo and the Chase Bank Building in downtown Fort Worth. Small banks “fill a great niche in the community,” he said, underwriting small business expansions, land development and projects like new shopping centers.
This year, federal regulators have grown concerned about commercial real-estate loans, which include financing for land development, speculative buildings and owner-occupied facilities. That has led to proposed guidelines, which are before Congress, that would limit the amount of real-estate loans in a bank’s portfolio.
Bank trade groups are lobbying against the rules, saying they could deny smaller banks their best shot at competing with national banks and other consumer lenders.
“Bankers across the country are not happy with the guidelines,” said Rick Smith, president of the Texas Bankers Association in Austin. “Instead of dealing with some isolated cases on a case-by-case basis, they’ve got a cure for the whole industry.”

Star-Telegram.com | 10/16/2006 | Small banks worry about real-estate lending changes.

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