August 5, 2015 Newsletter
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August 5, 2015

Industry Jobs

Issue Spotlight

SFIG Calendar



Advocacy Outlook

Industry News Highlights


SFIG is pleased to announce the formation of a new participant committee. Recognizing the growth of marketplace lending and the increased focus on these lending platforms, SFIG’s Marketplace Lending Committee is open to all SFIG members who have a legitimate interest in Marketplace Lending.

The committee has two primary purposes:

  1. Work with members involved in marketplace lending to educate the industry as a whole on all aspects of market place lending, with a particular focus on the securitization of assets generated through that lending channel, and
  2. Determine appropriate securitization-specific policy and engage in related advocacy, leveraging SFIG’s prominence and experience across all asset-classes to support the continued responsible growth of securitization in marketplace lending.

The committee is co-chaired by Will Black from Moody’s Investor Services and Peter Manbeck from Chapman and Cutler LLP.

The committee’s first call will be on Monday, August 10th at 3:00 p.m. (ET), with an agenda focused on the current request by the Department of Treasury for Input on Online Marketplace Lending.

SFIG will be responding to this request, with Peter Manbeck and Marc Franson of Chapman and Cutler LLP serving as drafting counsel.

If you would like to participate in the Marketplace Lending Committee, please contact


This afternoon, August 5th, SFIG sponsored a conference call for its members and other industry participants to hear Ford Motor Credit share its experiences after filing its Form SF-3 registration statement for the depositor of its retail auto loan securitization platform, Ford Credit Auto Receivables Two LLC.

This filing follows Ford Credit’s completion of the U.S. Securities and Exchange Commission's ("SEC") Reg AB II pilot review program. The pilot review submissions and correspondence have been made public on EDGAR shortly and the registration statement will become effective in the coming weeks.

During the call, Ford Motor Credit provided an overview of its Reg AB II compliant Form SF-3 registration statement, its pilot participation and key areas of focus. 

For access to a recording of the call, please contact


As part of our ongoing Mentoring & Sponsorship initiative, Women in Securitization (“WiS”) welcomes the very first class of forty women to the Mentoring Program. As part of WiS Week, August 13th-20th, we encourage our new Mentoring Program participants to dedicate time over coffee, lunch, or an after-work drink to better get to know your counter-part and begin developing your relationship.

The Mentoring Program was created to provide mentees the opportunity to gain insight into the world of securitization from experienced women who practice and work in this area of interest. While mentees will certainly benefit from learning from the experiences of their mentors, WiS believes that mentors will likewise gain valuable knowledge of the challenges facing women earlier in their careers and learn how to better support their female colleagues. Participants in the mentoring program have the opportunity to develop a dynamic two-way relationship that will contribute equally to both participants’ career development and experience.

WiS continues to work to ensure that every individual that can benefit from a mentoring relationship has the ability to participate in the program, and are continuing to work on creating partnerships. We welcome both interested early career professionals and women with many years of experience in our industry. WiS especially encourages seasoned professional women, with the time and knowledge available to lend to those still beginning their career, to apply as mentors. Please keep in mind that this program does require a commitment to devoting time and energy into building a relationship with your counterpart.

If you have not yet signed up to participate in the mentoring program, but are interested in participating, please complete the relevant form, which can be found here. All information submitted through the WiS Mentoring Program is kept strictly confidential and used for Mentoring Program purposes only.

While the mentoring program is currently limited to women professionals currently registered as part of the WiS initiative, SFIG members and non-members alike are encouraged to apply


SFIG is pleased to welcome Jennifer Wolfe, our newest staff member. Jennifer joins SFIG as ABS Policy Manager, bringing 12 years of experience in financial services including capital markets, consumer asset securitization, and asset-based lending. 

Most recently, she was Director of Finance at FS Card Inc., a new credit  card venture based in Washington, DC. Prior to that, Jennifer was a Vice  President at Merrill Lynch, where she focused on credit card receivables  financing and principal investments in credit card portfolios. As an  Associate at Merrill Lynch, she advised banks and finance companies on  public market securitizations across many asset classes. Before joining Merrill Lynch in 2000, Jennifer was an account manager at Financial Guaranty Insurance Company, issuing bond insurance policies for RMBS issuers. Jennifer holds an MBA from Columbia Business School, and a BA in Economics from Barnard College.

Jennifer can be contacted by email at or by phone at 202-524-6312.


Going forward SFIG will be including an additional section in its newsletter – “Industry Jobs”.

Recently we have redesigned the Jobs section of our website, and each week we will highlight positions posted by our member firms. If you are a member looking to fill an open position, please complete your submission here to have the job featured on our website. We encourage members to post their positions to the site and take advantage of this free benefit to membership.

SFIG will soon be launching the other side of our jobs portal, where job seekers can create a profile on the site, post their resume to the candidate database and connect with HR Representatives at member firms.

New positions added to the portal since July include:

SFIG is seeking talent to fill three open positions:

  1. Director of Mortgage Policy: will lead all initiatives related to mortgage-backed securitization. This is a high profile position within the SFIG leadership team working directly with executive management, the Board of Directors, Committee Chairs and key members of SFIG’s membership. Additional information on the position, as well as a link to the application, is available here.
  2. Communications and Media Manager: will be an integral member of SFIG staff, providing support across the whole organization and serving as a vital link between SFIG, its membership and other external audiences. Additional information on the position, as well as a link to the application, is available here.
  3. Executive/Administrative Assistant: will be responsible for supporting the Executive Director and Directors of Policy and Advocacy while directing overall front office activities, including the reception area, mail, calendar co- ordination, meeting set-up, purchasing requests and overall office management. Additional information on the position, as well as a link to the application, is available here.

For questions about positions at SFIG, please contact For questions about the website jobs portal, please contact

By: Peter Manbeck and Marc Franson, Partners at Chapman and Cutler LLP


Marc Franson Peter Manbeck

One of the most exciting developments in the financial markets this year has been the continued rapid growth of marketplace lending and the increasing frequency and volumes of marketplace loan securitizations. Regulatory uncertainty and costs nonetheless remain significant concerns for both marketplace lenders and investors. To a large extent, marketplace lenders are operating under a regulatory framework that did not anticipate internet-based lending and regulators have not always provided clear guidance on how to apply old laws to a new business. In addition, it’s widely expected that the Consumer Financial Protection Bureau and/or other regulators will eventually respond to the industry’s growth by adopting industry-specific regulations. It will be important for the industry to maintain a constructive dialogue with the regulators in connection with the development of any such rules. 

It follows that SFIG’s new committee on marketplace lending will have plenty of issues to consider. Among others, the regulatory issues currently facing the industry include: 

  1. Arrangements with Banks. Many marketplace lenders utilize a federally insured depository institution to serve as the lender of record. This structure provides for utilization of the bank’s federal preemption and ability to export rates and fees of its home state nationwide, allowing for uniform national programs as opposed to non-banks being subject to both state licensing requirements and individual state regulation, including of rates and fees. Critics of this structure claims that it enables non-bank lenders to avoid state licensing requirements and usury limitations. A recent West Virginia court case found that a payday lender making loans over the Internet evaded state licensing requirements and was the “true lender” for the Internet loans and voided the loans as they exceeded state usury limitations. Adverse court decisions could impact the marketplace lending industry.
  2. Recent Second Circuit Decision. In May, the Second Circuit Court of Appeals decided the case of Madden v. Midland Funding, LLC. The court, in broad terms, ruled that when a bank loan has been assigned and the bank is no longer involved with the loan, the assignee may not charge the rate allowed to be charged by the bank, but may only charge interest at the usury rate in effect for the state of the borrower. While most legal commenters on this decision believe that it is incorrect, the effect on assignment of bank loans in the Second Circuit is troubling. There are also potential effects for commercial as well as consumer loans and securitization, sale and collection structures could be affected by this decision. A question of choice of law was remanded to the lower court for consideration, and a rehearing by the full Second Circuit has been requested, but in the interim, uncertainty exists for the assignment of bank loans to non-bank entities.
  3. Risk Retention. The relevant portion of the federal risk retention rules will become effective in December 2016. At that point, any securitizer of marketplace loans - whether a balance sheet lender or an investor - will need to retain credit risk against the securitized loans in accordance with the regulations. In other situations, however, the application of the risk retention rules to marketplace lending may be less clear.  For example, will (or should) the regulators apply risk retention to marketplace lenders who sell loans under future flow agreements with a clear expectation - but no contractual requirement - that the purchaser will securitize the loans? Similarly, should borrower payment dependent notes (“BPD Notes”) be characterized as “asset-backed securities” subject to risk retention? Although BPD Notes appear to be “asset-backed securities” within the applicable Securities Exchange Act definition (since they are payable from the cash flow received on an underlying loan), they differ from “traditional" classes of asset-backed securities insofar as they provide for neither credit tranching nor pooling of credit risk. If risk retention does apply to BPD Notes, should the retention requirement apply to the originating bank (since it originates and sells the “securitized" loans) and/or to the program operator (since, like ABCP conduit and open market CLO managers, it determines the assets that will be “securitized”)? The determinations reached on these questions may have a significant impact on required capital levels for marketplace lenders and funding banks. 
  4. Access to Nonaccredited Investors. The two largest marketplace consumer lenders - LendingClub and Prosper - have registered their BPD Notes with the Securities and Exchange Commission under the federal Securities Act. The registration enables them to sell their BDP Notes to both accredited and nonaccredited investors in a public offering. In contrast, all other marketplace lenders that offer BDP Notes (or that otherwise offer securities via the internet) have determined that the costs, time delays and regulatory burdens associated with SEC registration outweigh the benefit of gaining access to public investors. These lenders accordingly offer their securities only in private placements limited to accredited investors. It has often been claimed that marketplace lending will benefit ordinary investors by providing them with access to an entirely new asset class. It is now clear, however, that to achieve this goal either the burdens imposed by federal and state securities regulations must be reduced or loan-based products other than BPD Notes must be made available. The SEC’s decision earlier this year to broaden its “Regulation A" offering exemption could help to make marketplace loan investments available to nonaccredited investors but, in practice, the offering caps that Regulation A imposes are probably still too low for most lenders to find it useful. It follows that unless Congress and/or the SEC decide to enact broader exemptions, the best means available to provide nonaccredited investors with access to marketplace loans may be through the development of pooled investment products (such as closed-end investment companies). 
  • THURSDAY, August 6, 2015
    10:00 a.m. – 11:00 a.m. (ET)
  • THURSDAY, August 13, 2015
    10:00 a.m. – 11:00 a.m. (ET)
FRIDAY, August 7, 2015
10:00 a.m. – 11:00 a.m. (ET)
MONDAY, August 10, 2015
3:00 p.m. – 4:00 p.m. (ET)
MONDAY, August 10, 2015
2:00 p.m. – 3:00 p.m. (ET)
TUESDAY, August 11, 2015
Note: Closed Meeting
WEDNESDAY, August 12, 2015
10:00 a.m. – 11:00 a.m. (ET)
TUESDAY, August 18, 2015
Note: Closed Meeting
WEDNESDAY, August 26, 2015
Note: Closed Meeting

THURSDAY, August 6, 2015 - SUNDAY, August 9, 2015
The Grand Del Mar
San Diego, CA
Please note, registration is by invitation only.

Richard Johns will be attending.

THURSDAY, August 13, 2015 – THURSDAY, August 20, 2015
Registration for WiS Week Roundtables available here.
WEDNESDAY, September 16, 2015 – FRIDAY, September 18, 2015
The Fontainebleau
Miami Beach, FL
Registration is available here
  • Richard Johns will be speaking on the “High Quality Securitizations” and “Assessing The Impact of Regulatory Reform on ABS Market Liquidity” panels
  • Sairah Burki will be speaking on “The Realities of Implementing Reg AB 2” panel
  • Michael Flood will be speaking on the “Single Asset/Single Borrower CMBS” panel
  • SFIG will also be sponsoring a “Women in Securitization” panel

WEDNESDAY, October 14, 2015 – THURSDAY, October 15, 2015

Workshop: Clifford Chance's Office, Hong Kong
Main Conference: Conrad Hong Kong, Grand Ballroom, Lower Lobby, Hong Kong

  • Sairah Burki will be speaking at the “Workshop: Developments in the US/EU Securitization and Covered Bonds Markets”
  • Richard Johns will be a discussion leader on “Simultaneous Roundtables”

More information on the conference can be found here


THURSDAY, October 29, 2015
Marriott New York Downtown
New York, NY
Registration available here


THURSDAY, November 12, 2015
Marriott New York Downtown
New York, NY
Registration available here


If you would like to participate in the work SFIG is undertaking through our committees as highlighted below, please e-mail For specific inquiries on any of SFIG’s advocacy efforts, please contact the staff member listed for the related project.

SFIG’s Marketplace Lending Committee was established in August 2015 as an SFIG participant committee and is open to all SFIG members who have a legitimate interest in Marketplace Lending. The committee was formed with two primary intentions: 1) to work with members involved in marketplace lending to educate the industry as a whole, with a particular focus on the securitization of assets generated through that lending channel; and 2) to determine appropriate securitization-specific policy and engage in related advocacy, leveraging SFIG’s prominence and experience across all asset classes to support the continued responsible growth of securitization in marketplace lending. The committee's first initiative will be to respond to the Treasury Department's Request for Input on Online Marketplace Lending. Peter Manbeck and Marc Franson of Chapman and Cutler LLP are serving as drafting counsel.

Members interested in participating should contact

SFIG has recently formed a Student Loan Working Group to focus on and respond to the Proposed Changes to Moody’s Approach to Rating Securities Backed by FFELP Student Loans.

To join SFIG’s Student Loan Working Group and learn more, please contact

The RMBS 3.0 Task Force released its Second Edition RMBS 3.0 Green Paper in November of 2014. Following the successful SFIG/IMN Private Label RMBS Symposium, the task force will continue its efforts to address key issues specific to private label mortgage securities through work streams relating to (1) Representations, Warranties, and Repurchase Enforcement; (2) Due Diligence, Data, and Loan-Level Disclosure; and (3) Role of Transaction Parties and Bondholder Communications. Presently, the task force is working on (1) developing a comprehensive compilation of representations and warranties for release in the fall of 2015 (2) a grid summarizing roles of transaction parties. We encourage members to participate in any or all of the working groups to contribute towards the mission of RMBS 3.0.

For additional information on RMBS 3.0, or to join the task force, please contact

The GSE Reform Task Force reviewed a draft response to the FHFA’s update to the single security initiative last Thursday. The task force also received an update from the SFIG participants on the Industry Advisory Group for the Common Securitization Platform and Single-Security. The task force has also formed policy positions on the Carney-Delaney-Himes GSE Reform bill and updated its briefing book to support its advocacy efforts. With the release of the bill, SFIG staff also updated its GSE Reform Legislative Comparison, which analyzes key provisions in the five most recent housing finance reform bills including the Johnson-Crapo bill and the PATH Act. Additionally, The task force will continue to engage the Federal Housing Finance Agency on its Single-Security proposal, guarantee fee pricing and Strategic Plan for 2015-2019.

To join SFIG’s GSE Reform Task Force and learn more, please contact

The Mortgage Loan-Level Disclosure Task Force is studying the recent Regulation AB II release of Schedule AL and comparing it to SFIG’s Schedule L submission to the Securities and Exchange Commission in February of 2014. SFIG also continues to have weekly Mortgage Industry Standards Maintenance Organization calls to go through data elements that lenders should deliver in securitizations. We will also be conducting an analysis of the data elements included in SFIG’s Schedule L submission in order to determine any privacy concerns.

Please contact for additional information on SFIG’s work on this topic.

The Volcker Task Force has been working with SFIG’s various asset class and legal counsel committees to identify areas within the Volcker Rule in need of clarification, particularly questions regarding covered funds and the loan securitization exemption.

Please contact to participate on the Task Force.

The Risk Retention Industry Guide Work stream is creating best practices and developing consensus positions around several areas within the Credit Risk Retention final rule.

Please contact with any questions.

SFIG’s Chinese Market Committee continues to hold discussions with a focus on SFIG’s partnership with the Chinese Securitization Forum, potential upcoming educational discussions and the sharing of recent market developments in China.

If you would like more information on SFIG’s work with respect to Chinese securitization, please contact

SFIG’s Shadow Banking Task Force has established the following agenda:

  • Leverage the predictive powers of the G20’s shadow banking initiative to determine future SFIG advocacy initiatives
  • Assess the level of regulation to which our members are already subject
  • Measure the full impact of those regulations on lending decisions and business models
  • Provide input into IOSCO, BCBS and IAIS on the revitalization of securitization markets

The task force will have its first full meeting in the coming weeks, and members from across asset classes are encouraged to participate.

To register your interest in SFIG’s Shadow Banking Initiative, please contact

The Regulation AB II Task Force will focus on the disclosure and offering process requirements within the final rule. Two work streams have been formed to develop a comment letter on the proposed rules that remain outstanding and to produce an industry guide for critical elements of the final rule.

SFIG members who are interested in joining this task force or asset specific committees should contact

The Regulatory Capital and Liquidity Committee is addressing industry concerns related to the Federal Reserve Board’s Final Rule on the Liquidity Coverage Ratio (“LCR”). This committee will also develop a comment letter when U.S. regulators release their proposed Net Stable Funding Ratio (“NSFR”).

To become involved in SFIG’s advocacy on the final LCR or NSFR rules, please contact

The Derivatives in Securitization Task Force obtained no-action relief from the CFTC giving swap dealers comfort that the CFTC would not take enforcement action against swap dealers that did not comply with certain CFTC Regulations when taking actions in response to the credit ratings downgrade of a counterparty to a legacy swap. The relief applies to swaps with SPVs that were in existence prior to October 10, 2013. The task force also commented on the CFTC’s proposal on margin requirements for uncleared swaps, as well as the prudential regulators’ proposal regarding margin and capital requirements for covered swap entities.

SFIG members who are interested in learning more about this initiative should email

The Money Market Fund Reform Working Group submitted a comment letter on October 13, 2014 regarding the Securities and Exchange Commission’s July 23, 2014 proposal which includes, among other things, possibly amending rule 2a-7’s issuer diversification provisions to eliminate an exclusion that is currently available for securities subject to a guarantee issued by a non-controlled person. SFIG also submitted a comment letter in September 2013 on Money Market Fund Reform.

If you are interested in joining this working group, please contact

The High Quality Securitization ("HQS”) Task Force responded to the European Commission’s consultation on an EU framework for simple, transparent and standardized securitization on May 12, 2015. The task force also previously responded to the BCBS-IOSCO consultation on its criteria for identifying simple, transparent and comparable securitizations. SFIG’s comments were built off of those sent to the European Banking Authority on January 14th (available here) regarding its proposed criteria and to the European Central Bank and Bank of England last summer (available here) regarding the development of a sustainable securitization market in Europe.

To join the HQS Task Force, please contact


The Volcker Rule, a section of the Dodd-Frank Act that prohibits any banking entity from engaging in proprietary trading and from acquiring or retaining an ownership interest in, sponsoring, or having certain relationships with, a hedge fund or a private equity fund, became effective last Sunday, July 26th.

According to a recent Wall Street Journal article, most big banks are already in compliance with the rule, after having shed their proprietary-trading desks, pulled money from certain investment funds and ceased other restricted activities under the rule.

The article also highlighted how regulators have tried to ease the transition, giving banks more than 18 months to conform trading operations and a deadline of 2018 to sell certain investment funds. The rule “is big and new and will cause changes in behavior,” said Karen Solomon, Deputy Chief Counsel at the Office of the Comptroller of the Currency, one of five U.S. agencies enforcing the rule. “The likelihood that you can turn on a dime, particularly for the large institution, is pretty small. So [regulators] don’t want to set up expectations that are unreasonable.”


The U.S. Government Accountability Office (“GAO”) completed a recent study on the merits and feasibility of creating a professional organization for rating analysts employed by nationally recognized statistical ratings organizations (“NRSROs”). Last Thursday July 30th, the GAO released a full report describing views on the potential merits of and need for a professional organization for credit rating analysts and the challenges associated with such an organization. Several participants from the study expressed that it is too early to tell if a professional organization is needed and believe that the Securities Exchange Commission’s (“SEC’s”) new regulations should be evaluated before it is determined in what areas a professional organization might add value.

Several participants in the study concluded that challenges in creating and operating a professional organization would include:

  • Clearly delineated purpose: Delineating the mission or purposes of an organization would be difficult at the present time because the effects of the new SEC regulations were unknown
  • Adequate funding: Obtaining sufficient funding through membership fees also might be difficult because of the relatively small population of analysts (about 4,500 as of 2014)
  • Balanced representation: Creating an organizational structure that would provide equitable representation for all members, including from smaller NRSROs, could be challenging because of industry concentration (88 percent of analysts work for 3 of the 10 NRSROs)
  • Meaningful activities: Developing core activities and services, including professional standards, education and training curricula, certification tests, and structures to oversee member compliance could be challenging due to differences in NRSRO methodologies, concerns about sharing confidential information, and analyst specialization in specific rating classes (such as insurance or asset-backed securities)

The GAO is sending copies of the report to the appropriate congressional committees and members, SEC and other interested parties. Click here to view the full report.


The European Central Bank (”ECB”) exceeded its monthly asset-buying target in July before liquidity is expected to dry up during the region’s prime vacation month, according to a recent Bloomberg article.

Purchases have exceeded their monthly goal of €60 billion ($65.7 billion) since May. The ECB bought €61.3 billion ($67 billion) of public and private debt under its quantitative–easing program. Specifically, the ECB purchased €51.4 billion ($56.2 billion) of government and agency bonds, €9 billion ($9.9 billion) of covered bonds, and €944 million ($1.03 billion) of ABS.

The ECB will be running their quantitative-easing program until September 2016, or until they have determined that the euro-area inflation rate in back on track towards their goal of just under 2 percent.


New data shows that CMBS issuance in New York City reached the highest total in the first half of any year since the crisis, according to an article in The Real Deal. In the first half of 2015, new securitized loans based on New York City properties reached $11.54 billion, up 47 percent from $7.83 billion last year.

CMBS loans based on retail properties saw the strongest growth and properties in Brooklyn and Queens received a boom in real estate investment. New securitized loans based on Brooklyn properties grew from $231.6 million in the first half of 2014 to $1.13 billion in the first half of this year, while the Queens total grew from $231.6 million to $1.23 billion. 


SFIG has a number of Committees and Task Forces meeting and working on many topics of interest to the securitization industry. Please email us for more information, including how to join.

SFIG is pleased to share this edition of its newsletter with our members, as well as our supporters in the structured finance community. To ensure that you receive future editions of the newsletter, please visit our website or email us to learn more about membership opportunities.

Contact Information

Richard Johns Executive Director

Kristi Leo Investor Relations

Sairah Burki Senior Director, ABS Policy

Michael Flood Director of Advocacy

Jennifer Wolfe ABS Policy Manager

Mary Robinson Policy Manager

Alyssa Acevedo Senior Analyst, ABS Policy

Amanda Bateman Policy Analyst

Daniel Tees Policy Analyst

Jennifer Serpas Office Manager

Allison Creswell Events Coordinator

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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