Responding to an incoming letter from Nareit and other trade organizations, on June 4, 2020, the Office of the Comptroller of Currency (OCC) issued a letter affirming that the April 7 interagency guidance, issued jointly by all federal financial regulators, which encouraged banks to work constructively with borrowers affected by COVID-19, applies to lending and financial arrangements with nonbank financial borrowers such as mREITs. In its response, the OCC stated that it "...understand[s] the significance of nonbank lenders in the U.S. economy, particularly during the COVID-19 public health and economic crisis, and we support financial institutions’ role to provide financing to nonbank lenders. ..".
On May 15, Nareit and 10 other groups, including the U.S. Chamber of Commerce, the Institute for Portfolio Alternatives, and The Real Estate Roundtable, wrote to the financial regulators requesting clarification that the agencies' prior guidance applies to credit extended to non-bank lenders via warehouse lines, repurchase agreements secured by multifamily and commercial real estate loans, and other commercial mortgage-related borrowings. The trade group letter noted that lending to non-bank lenders is responsible for some $1.14 trillion in commercial real estate development and operations.
(Contact: Victoria Rostow at vrostow@nareit.com)