Eye Real Estate Ownership
In the U.S., national banking laws generally bar banks from owning
and developing commercial real estate unless the buildings are
predominantly occupied by employees doing bank business.
Although banks have historically been excluded from all but the
financing end of real estate, they are trying to enter other aspects
such as developing projects and competing in the housing market.
(Regulators, wary of a high concentration of bank portfolio loans in
the volatile commercial real estate market, fear a sudden economic
downturn could impair bank capital.)
But recently the Comptroller of the Currency, a unit of the Treasury
Department that regulates national banks, incrementally broadened
its interpretation of permissible development activities. In
postings on its Web site, it approved major real estate projects by
two banks that go beyond the scope of typical bank real estate
The two major banks
(PNC Financial Services Group of Pittsburgh and Bank of America of
Charlotte) received the green light from regulators to develop and
own large hotel and office properties, potentially opening the door
wider for banks desiring to enter the commercial real estate
business beyond their traditional role as lenders.