risk retention

Treasury Request for Public Input on Expanding Access to Credit through Online Marketplace Lending

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“Online marketplace lending refers to the segment of the financial services industry that uses investment capital and data-driven online platforms to lend to small businesses and consumers.”[1]

On July 20, the Department of the Treasury published a Notice and Request for Information (“RFI”) seeking comment on various aspects of online marketplace lending, including –

  • the business models and products offered to small businesses and consumers
  • the potential to expand access to credit to underserved market segments
  • how the financial regulatory framework should evolve to support the growth of the industry
  • Treasury asks for comment on 14 categories of questions, some of which include multiple specific questions, which we summarize and, with respect to some, offer initial thoughts on below.

To view the full article, please click here.

[1] 80 Fed. Reg. 42866 (July 20, 2015)

Joint Proposal on Risk Retention

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On August 28, the FDIC, Fed, FHFA, OCC, SEC and HUD issued a notice of revised proposed rulemaking relating to required risk retention by sponsors in securitization transactions.  The proposed rule would define “qualified residential mortgage” (QRM) in the same way that the CFPB has defined qualified mortgages (QMs) and would exempt securitizations of QRMs from the risk retention requirements.  Comments on the revised proposed rule must be submitted by October 30.  Joint Release.  Proposed Rule.

House Subcommittee Hearing on Transparency as Alternative to Risk Retention

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On May 11, the House Committee on Oversight and Government Reform Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs held a hearing on whether transparency and disclosure in securitization is a better alternative than the proposed risk retention requirements. Hearing Testimony.

Fed Report on Impact of Dodd-Frank Risk Retention

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On October 19, the Fed, as required by the Dodd-Frank Act, issued a report on the potential impact of risk retention on the securitization markets.  The report highlights differences between securitizations backed by different types of assets and recommends that these differences be taken into account by the regulatory agencies when developing risk retention requirements. Fed Release. Fed Report.