Credit Risk Retention
April 29, 2011 - 76 FR 24090 - RIN: 2501-AD53 - Download Full Notice: Text | PDF
The OCC, Board, FDIC, Commission, FHFA, and HUD (the Agencies) are proposing rules to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 (15 U.S.C. 78o- 11), as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 15G generally requires the securitizer of asset-backed securities to retain not less than five percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as ``qualified residential mortgages,'' as such term is defined by the Agencies by rule.
Agency Contact: OCC: Chris Downey, Risk Specialist, Financial Markets Group, (202) 874-4660; Kevin Russell, Director, Retail Credit Risk, (202) 874-5170; Darrin Benhart, Director, Commercial Credit Risk, (202) 874-5670; or Jamey Basham, Assistant Director, or Carl Kaminski, Senior Attorney, Legislative and Regulatory Activities Division, (202) 874-5090, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
This is a proposed regulation. Comments were due on June 10, 2011.
Mercatus Center Regulatory Report Card
Score:
27 / 60
45%
F
What this Rule is Proposing
The Agencies are proposing rules to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 (15 U.S.C. 78o–11), as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 15G generally requires the securitizer of asset-backed securities to retain not less than 5% of the credit risk of the assets collateralizing the asset-backed securities. The proposed rule prohibits a securitizer from directly or indirectly hedging or otherwise transferring the credit risk that the securitizer is required to retain under section 15G and the Agencies implementing rules. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as ‘‘qualified residential mortgages,’’ as the term is defined by the Agencies by rule.
Monetized Costs & Benefits (as reported by agency)
| Dollar Year | Not Reported by Agency | |
| Time Horizon (Years) | Not Reported by Agency | |
| Discount Rates | Not Reported by Agency | Not Reported by Agency |
| Expected Costs (Annualized) | Not Reported by Agency | Not Reported by Agency |
| Expected Benefits (Annualized) | Not Reported by Agency | Not Reported by Agency |
| Expected Costs (Total) | $57.2 mil | Not Reported by Agency |
| Expected Benefits (Total) | Not Reported by Agency | Not Reported by Agency |
| Net Benefits (Annualized) | Not Reported by Agency | Not Reported by Agency |
| Net Benefits (Total) | Not Reported by Agency | Not Reported by Agency |
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