The smallest local banks are pulling out of construction and development lending because of concerns over regulatory changes brought on by Dodd-Frank consumer protection act, a speaker at the annual Trends in Real Estate seminar said Thursday.
Brian Andrews, with the Real Estate Research Institute at LSU’s E.J. Ourso College of Business, said small local banks don’t know what they are allowed to do under Dodd-Frank.
Andrews said large regional banks have come in to handle lending for homebuilders.
Lenders are interested in loaning money for apartment developments and grocery-anchored retail developments, Andrews said.
“There’s a little change in appetite,” he said. “Lenders are hungry.”