standardized representations and warranties

U.S. Treasury Department Issues White Paper on Online Marketplace Lending Industry

On May 10, 2016, the Department of the Treasury issued a white paper on online marketplace lending that maps the current market landscape, reviews industry insights and offers policy proposals for the road ahead.  Based on approximately 100 responses from online marketplace lenders, financial institutions, investors and other key industry figures, the Treasury, in consultation with the CFPB, FDIC, Federal Reserve Board, FTC, OCC, SBA and SEC, made several notable recommendations and observations.

The white paper explores policies that would expand regulatory oversight, including standardized representations and warranties in securitizations, pricing methodology standards, the implementation of a registry for tracking data on transactions and the reporting of loan-level performance, among others.  In addition, the Treasury mentions potential cybersecurity threats, anti-money laundering, the uneven protections and regulations in place for small business borrowers and the growth of the mortgage and auto loan markets as some of the emerging trends to monitor.  The Treasury is also considering the role of federal agencies in regulating these areas, including the formation of an interagency working group for online market place lending.  Press ReleaseWhite Paper.

Rating Agency Developments

On January 15, S&P released its revised methodology and assumptions for projected losses for certain U.S. RMBS prime, subprime, and Alt-A transactions issued from 2005 through 2007.  S&P Methodology

On January 13, DBRS updated its rating criteria for U.S. RMBS to provide standardized representations and warranties for newly originated collateral, as well as a standardized set of representations and warranties for seasoned pools.  DBRS ReleaseDBRS Methodology

On January 15, DBRS released its CMBS rating methodology.  DBRS Methodology.  

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