December 2, 2015 Newsletter
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December 2, 2015

Issue Spotlight

Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


Last week, as part of an effort among several trade associations, SFIG submitted a comment letter to Treasury and the Federal Reserve regarding Basel's Fundamental Review of the Trading Book (“FRTB”). This letter highlighted the concerns regarding the impact to securitization and requested the regulators’ continued attention to this issue.

This week, SFIG is working with its joint-trade association partners to develop a strategy and talking points to raise the industry's concerns with the proposed rule to Members of Congress.

The talking points and the letter stress the connection between the high capital charges the proposal would require, and a resulting reduction in market making and credit availability. The Basel FRTB working group is finalizing its proposal and the Basel Committee itself is meeting at the beginning of December.

Contact to learn more about SFIG’s Congressional outreach efforts.


This week, SFIG met with the staff of Representatives Edward Royce (R-CA), John Delaney (D-MD) and Senator Bob Corker (R-TN) to discuss mortgage Real-Estate Investment Trust (“mREIT”) participation in government-sponsored enterprise (“GSE”) credit risk sharing transactions (“CRTs”). In 2013, the Federal Housing Finance Agency directed the GSEs to issue mortgage credit securities in order to shift credit risk to the private sector and further protect the taxpayers. However, there are regulatory obstacles that prevent mREITs from fully participating in CRTs.

Last week, Securities and Exchange Commission (“SEC”) Chair Mary Jo White testified before the House Financial Services Committee and agreed to work with Congressman Royce on the increasing mREIT participation in CRTs.

Contact to learn more about SFIG’s Congressional outreach efforts.


Earlier this week, SFIG’s Executive Director, Richard Johns, attended the 2015 Australian Securitisation Conference in Sydney. The conference focused on both domestic and global developments affecting the securitization market. Mr. Johns spoke on the “Securitisation Insight from Around the World” panel in which he gave an overview of the U.S. regulatory landscape and its effects on securitization.

Mr. Johns also met with Greg Medcraft and Steven Bardy of the Australian Securities and Investments Commission and with representatives of the Asia Securities Industry & Financial Markets Association. The discussion focused specifically on standardization initiatives via, for example, “simple, transparent, and standardized” securitizations, RMBS 3.0, and the development of the China securitization market and marketplace lending platforms. In addition, Medcraft and Bardy provided interesting insights into the use of blockchain technology and its potentially revolutionizing impact on capital markets. We invite our readers to learn more about this technology and the views communicated by Medcraft in his speech to Carnegie Mellon University by reading this week’s Issue Spotlight.


SFIG and event partner Information Management Network ("IMN") are pleased to announce the Structured Finance Canada conference, taking place May 31-June 1, 2016. Conveniently located in the main financial hub of Toronto, this gathering will bring together all the key stakeholders in the Canadian structured credit market. The event will commence the evening of May 31st, with an industry reception and dinner for market participants, providing an optimal setting to meet with current and prospective clients.

Reserve your place today!

To register and view more information about the conference, please click here.

If you have any questions about the conference, please email


Registration is almost at capacity for our Women in Securitization (“WiS”) Networking Workshop on December 8th at 4:00 p.m. (EST)!

Michelle Friedman MA, PCC, will lead an interactive workshop to help provide our industry’s women with the most effective and enjoyable strategies to develop and extend professional networks. Ms. Friedman focuses on Executive Coaching and Organizational Consulting at Advancing Women's Careers, LLC, where she helps individuals and organizations promote the retention and advancement of women throughout the financial services industry.

Date: Tuesday, December 8, 2015
Time: 4:00-7:00 p.m. (EST)
Location: New York, NY

Only a few spots remain and attendance is limited to industry women only. A reception will follow the event.

You must be a registered WiS member to attend. If you are not yet registered for WiS, sign up here


A speech by Greg Medcraft, Chairman, Australian Securities and Investments Commission, Distinguished speaker series, Carnegie Mellon University (Adelaide, Australia on September 16th, 2015)

Good afternoon, everyone. I would like to thank Dr. Bolongaita for inviting me here. It is a privilege to speak with the faculty and students of Carnegie Mellon University.

This university has a long history of stimulating important conversations and exploring real solutions to the challenges facing our society. I am pleased and honoured to contribute to this tradition today.

I’d like to talk today about the future of capital markets, particularly the impact on those markets of rapid developments in digital technology – which I call ‘digital disruption’.
I will do so with two hats. The first is as Chairman of ASIC, the second is as Chair of the International Organization of Securities Commissions – or IOSCO.

By way of background, IOSCO brings together markets regulators from over 120 jurisdictions – which together represent over 90% of global capital markets by value.

It is the key reference point for financial services and markets regulation globally. Its role includes:

  • identifying emerging global risks,
  • developing guidance and standards where appropriate to deal with those risks, and
  • supporting members in developing, supervising and enforcing the law in their jurisdictions.

Today I will talk specifically about three things:

  • Firstly, I will outline some of the changes that digital disruption is bringing to existing business models.
  • Secondly, I will talk about the potential that these developments have for capital markets as we know them, with particular reference to the emergence of blockchain technology.
  • And finally, I will outline how regulators might respond.

My main message today is that digital disruption has enormous potential to reconfigure and radically improve the efficiency of global capital markets.

I see this happening because digital disruption will give investors, and businesses looking for capital, more direct, more immediate and cheaper access to each other. And what this means, for us as regulators, is reconfiguring our toolkit around the end users of our markets – businesses and investors – and how they behave. Given the speed of change, we need to think about that toolkit now.

Before I expand on these ideas, let me first give you some background about ASIC, our priorities, the challenges we face and how we are meeting them.

Greg Medcraft’s full speech may be found here.


SFIG currently has two open positions for:

  • 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.

  • 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 coordination, 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.

Some of the latest industry positions available include:

Head of US Primary Structured Credit Ratings   Moody’s Corporation 11-18-15
Associate Analyst 2   Moody’s Corporation 11-02-15
Senior Vice President, RMBS Monitoring   Moody’s Corporation 11-02-15
Vice President, Senior Credit Officer   Moody’s Corporation 11-02-15
CLO Legal Analyst   Moody’s Corporation 11-02-15
Lead Ratings Analyst – Asset Backed Securities Group (Student Loans)   Moody’s Corporation 11-02-15
Senior Vice President Operational Risk Assessment Analyst   Morningstar Credit Ratings, LLC 10-29-15
High Yield - Legal Analyst   Babson Capital Management 10-22-15
Finance Associate   Hogan Lovells US LLP 10-09-15
Attorney - Securitization   Ford Motor Credit Company 9-29-15

Please visit our Jobs page for a full listing of available positions.

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

  • THURSDAY, December 3, 2015
    10:00 a.m. -11:00 a.m. (EST)
  • THURSDAY, December 10, 201
    10:00 a.m. -11:00 a.m. (EST)

THURSDAY, December 3, 2015
1:00 p.m. – 2:00 p.m. (EST)


WEDNESDAY, December 9, 2015
2:00 p.m. – 3:00 p.m. (EST)


MONDAY, December 7, 2015
1:00 – 5:00p.m. (EST)
Fannie Mae Conference Center
Washington, DC
Note: Closed Meeting

  • SFIG's Executive Director, Richard Johns, along with Keith Bickel of Bank of America, Raghu Kakumanu of Wells Fargo and Faith Schwartz of CoreLogic will attend the meeting on behalf of SFIG’s membership

TUESDAY, December 8, 2015
4:00 -7:00 p.m. (ET)
Mayer Brown LLP
New York, NY
Registration available here


WEDNESDAY, December 9, 2015
12:00 p.m. – 5:00 p.m. (ET)
Deloitte & Touche
New York, NY
Note: Closed Meeting


SUNDAY, February 28, 2016 – WEDNESDAY, March 2, 2016
The Aria Resort & Casino
Las Vegas, NV
Registration is 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. For its first initiative, the committee commented on the Treasury Department's Request for Input on Online Marketplace Lending. The comments were submitted on September 30th and drafted by counsel at Chapman and Cutler LLP.

Members interested in participating should contact

SFIG’s Student Loan Committee recently responded 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 Third Edition RMBS 3.0 Green Papers in November 2015. The task force has continued 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. We encourage members to participate in any or all of the working groups to contribute towards the mission of RMBS 3.0. For its 2016 agenda, the task force will address topics including the inclusion of an independent Deal Agent in transactions, Bondholder Communications, Data and Loan-Level Disclosure, Repurchase Enforcement, and Settlements, as well as undertake a review of the previously published Green Papers.

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

SFIG, through its GSE Reform Task Force, along with several other trade associations, submitted a letter to the FDIC, Fed and OCC regarding the effect of homeowner’s association ‘super-liens’ on private-label RMBS and whole loan transactions. The task force also submitted comments on FHFA’s update to the single security initiative on October 7, 2015. The task force is expecting to receive an update from the SFIG participants on the Industry Advisory Group for the Common Securitization Platform and Single-Security following its second meeting on December 7th. 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 2014. SFIG also continues to have weekly Mortgage Industry Standards Maintenance Organization calls to go through data elements that lenders should deliver in securitizations. The task force 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 Working Group 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

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


Last Thursday, November 27th, the Australian Prudential Regulation Authority (“APRA”) revealed its plans for reforms to ABS regulation, according to an article in Brisbane Times. One of APRA’s concerns had been specific to warehousing; i.e., the level of capital held by originators that are deposit-taking institutions against the risk of default while the loans are warehoused. Previously, APRA’s former head of policy, Charles Littrell, had said APRA’s priority is safety rather than allowing small lenders to survive. But the regulator decided to remove any specific reference to warehousing in the new rules and will instead take a “principles-based” approach. APRA will rely on its own supervision of warehousing and will make decisions “on a case-by-case basis.”

The APRA explains that warehouse arrangements allow authorized deposit-taking institutions (“ADIs”) to aggregate assets into pools before securities are issued to third parties, thus enabling ADIs to improve access to wholesale funding markets and raise funds at more competitive rates. “The current regulatory requirements for warehouse arrangements have, however, created a gap in the prudential framework, such that less capital is held in the banking system relative to the risk retained in the system,” APRA said. The regulator wants the industry to come up with suggestions on what it can do to deal with the shortfall in capital.


A recent article in the Wall Street Journal presented opposing views on the expected impact to the solar industry after the Investment Tax Credit (“ITC”) is set to expire in 2016. The solar industry has experienced more than triple-digit compound annual growth since implementation of the ITC in 2006. The current 30% tax credit available for residential systems will disappear, and the credit for commercial systems will be reduced to 10%, if the ITC is allowed to expire. Many in the solar industry say that without the ITC, “installation of solar-power systems will plummet,” but others believe that the industry will still continue to grow, “albeit not as quickly as before.”

Amit Ronen, director of the GW Solar Institute and a professor at George Washington University, writes that what the solar industry needs is the “same as every business: certainty.” He argues that the industry is already feeling the impact, with “installers rushing to complete projects before 2016, with many larger projects already shelved.”  Mr. Ronen believes a gradual ramp downward would “provide developers and financiers a long enough runway to stay in the game and make solar projects a comfortable investment play.”

The more optimistic side of the argument presented by John Farrell, director of the Democratic Energy initiative at the Institute for Local Self-Reliance, states that in terms of benefits from the tax credit, “financial middlemen have absorbed nearly half the tax credit, and as a result, solar developers and customers have received an effective discount of 15% instead of 30%.” Additionally, a silver lining from the phasing out of the tax credit could be that developers will seek new options for financing projects. “Solar energy’s low risk and steady returns are attracting new investors … one company has already offered the first solar securitization, packaging solar leases into vehicles for institutional investors.”


Yesterday, December 1st, House and Senate Conferees agreed upon a $235 billion, 1301 page highway transportation funding bill. H.R. 22, Fixing America’s Surface Transportation Act, is expected to be signed into law by the President as early as this Friday. Important to SFIG members, the bill contains many financial services provisions, including:

  1. Exception to issuing an annual privacy notice – If a bank has not changed its privacy policy from year-to-year, it will no longer be required to provide an annual privacy notice disclosure to its customers after the relationship begins.
  2. Tenant income verification relief – Permits Housing and Urban Development (“HUD”) to allow public and assistant housing administrators to verify income once every three years for low-income tenants that have fixed incomes.
  3. Increase Federal Home Loan Bank (“FHLB”) membership – Permits credit unions to be eligible for FHLB membership.
  4. Repeal of swap indemnification requirements – Repeals the indemnification requirements for regulatory authorities to obtain access to swap data, in order to allow data to be shared with foreign authorities.
  5. Capital Relief for small banks – provides relief from the capital and leverage requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) for bank holding companies with less than $15 billion in assets.
  6. Expanding rural lending – Requires the Consumer Financial Protection Bureau (“CFPB”) to create a petition process to allow interested parties to apply for an area to be designated as rural. In addition, the CFPB may treat balloon loans as “qualified mortgages” if such a loan was extended by a creditor operating in rural or underserved areas.

The text and summary of H.R. 22 can be found here and here. Please contact to learn more about SFIG’s Congressional outreach efforts. 


European lawmakers are moving ahead to finalize new rules on ABS. A recent Bloomberg story reports that the deal is “on course to be approved by national representatives” as EU nations have responded to the European Commission’s September 30, 2015 proposed legislation. 

The Presidency of the Council of the EU published its third compromise proposal on November 30th relating to the proposed regulation which creates a European framework for simple, transparent and standardized (STS") securitization. As the article details, the proposed legislation “includes a section on how to handle capital treatment for some investors who retain senior positions on synthetic securitizations that are backed by loans to small and medium-sized enterprises, especially where there are ties to government or promotional bank guarantees.”  On November 30th it also published a third compromise proposal relating to the proposed regulation amending the Capital Requirements Regulation ("CRR").

Finalizing the proposed legislation will require the EU nations and the EU parliament to agree on a final version of the rules. As reported in the article, if “nations move forward with the draft agreement, it will pave the way for talks with the parliament once the legislature is ready on its end to proceed.”


According to a recent Fitch Ratings article, strong U.S. employment growth is expected to keep the performance metrics of credit card ABS near records through the end of this year.

The unemployment rate for October fell to 5 percent, a steady decline from 5.7 percent since the start of this year and suggests a sustained improvement in the labor market.

Fitch reports that prime charge-offs are expected to increase during November while gross yield and the monthly payment rate should decrease slightly but remain above historical standards.


On November 25th, the Federal Housing Finance Agency (“FHFA”) announced that the maximum loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2016 will remain at existing levels, except for 39 high-cost counties where they will increase. Aside from these counties, the loan limit will remain at $417,000 for one-unit properties.

The FHFA determined that the average U.S. home value in the third quarter of this year remained below its level in the third quarter of 2007. This is part of the FHFA’s calculation for keeping the $417,000 loan limit the same for 2016.


Kroll Bond Ratings Agency’s (“KBRA”) Single Borrower SFR Comprehensive Monitoring Report notes that properties tied to single-borrower single-family rental (“SFR”) securitizations are appreciating in value, according to an article in DS News. The article states, “[t]he single-borrower SFR securitization market recently passed $13 billion in issuance with its 25th transaction.” According to KBRA, “the 23 transactions in KBRA’s rated universe were issued by eight sponsors that own 157,000 properties; approximately 91,000 of those properties have been securitized and have appreciated by an average of 8.7 percent since the transactions’ respective issuance dates.”

Trepp LLC is predicting that more CMBS issuance will be backed by multifamily properties in the coming years, according to an article in “Given the large balance of multifamily loans maturing in the next two years, these factors will serve as a pipeline for additional multifamily,” said Joe McBride of Trepp. In its new study of the apartment sector, Trepp also cites increased investment in multifamily as a result of loosening underwriting standards. The article states, “[t]he current year will see another $2.8 billion of non-agency CMBS loans maturing during the fourth quarter, and a total of $32.1 billion coming due in 2016 and 2017, representing 12.8% of the total of CMBS maturities during those two years.”

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, Advocacy

Dan Goodwin Director, Mortgage Policy

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

Sarah Clarke Executive Administration

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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