July 13, 2016 Newsletter
To ensure receipt of this newsletter, please add info@sfindustry.org to your address book. 
Problem viewing this email? Click here for our online version.
July 13, 2016

Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


Tomorrow, July 14th, SFIG’s Director of Mortgage Policy, Dan Goodwin, will testify before the Treasury Department and IRS officials on Section 385 of the Internal Revenue Code of 1986. Mr. Goodwin will also address conflicts associated with The Code’s "Funding Rule", a devastating provision of Sec. 385 that would effectively drain liquidity amongst issuers and other businesses.

In addition to his remarks on Section 385’s Funding Rule, Mr. Goodwin will discuss the broader implications of excessive regulations on the real economy, such as adverse tax consequences for securitized products.

SFIG's Tax Policy Committee submitted a comment letter on July 6th to the IRS regarding the income tax regulations under Section 385.

  Back to top

SFIG held its Board of Directors meeting on Tuesday, June 28th, and elected its new Board, effective immediately. Fifteen new organizations were added to the Board, replacing those rotating off. Chris Haas of Bank of America, Howard Kaplan of Deloitte & Touche LLP, and Jason Kravitt of Mayer Brown remain in the Officer positions of Chair, Vice-Chair and Secretary. Michele Olds of Nationstar Mortgage LLC was elected Treasurer of the Board. Please click here to view SFIG’s newly elected Board of Directors.

SFIG’s Board of Directors is comprised of 41 individuals representing member firms. The SFIG Board represents its key member groups including investors, banks, issuers, accounting firms, rating agencies, law firms, servicers, research firms, trustees and one at-large representative.

The Board will continue to set the strategic direction for SFIG and oversee management of the affairs of the organization, including directing policy initiatives; advising on advocacy efforts; organizing educational events; and ensuring that the organization properly represents the full spectrum of its members' views.

New Board members and Board officers are elected for a two-year term. SFIG is committed to rotating a significant portion of Board members each year. By doing so, not only does the association ensure it benefits from fresh perspectives, but it also enables full transparency into its governance process with all member institutions able to participate in the nomination and election process.

SFIG is grateful to our retiring Board members for their leadership and dedication during the past year and looks forward to their continued contributions to SFIG and the industry.

  Back to top

Please join SFIG on Sunday afternoon, September 18th, at ABS East 2016 for a comprehensive overview of the most current and pressing advocacy issues facing the securitization market and how the industry is responding.

SFIG will be hosting a series of updates on key initiatives for the benefit of ABS East attendees on Sunday, September 18th from 12:30 p.m. – 4:30 p.m., Track C. Advocacy efforts to be covered include RMBS 3.0, Reg AB II and marketplace lending. Investor closed door roundtable discussions will also be held covering Market Liquidity and the SFIG Investor advocacy agenda.

 Please visit here to view the complete agenda.

  Back to top

SFIG’s Women in Securitization (“WiS”) initiative is pleased to announce WiS Week 2016! WiS Week will consist of a series of regional roundtable events being held this August in various cities. The theme is “Empowering Women to Succeed,” and at each event we will present customized content on the topic of “Negotiating for Yourself.” A video presentation and other materials will be utilized to deliver attendees instruction, resources, and tools for improving one’s negotiating skills.

We are excited to announce the following WiS Week roundtables:
Please click link under the date to register.

MONDAY, August 1st

TUESDAY, August 2nd

WEDNESDAY, August 3rd

THURSDAY, August 4th

As the discussion topics and content will be consistent at each roundtable event, we ask that attendees choose the date that is most convenient. Due to limited capacity for each event, we are prioritizing registration for women.

We would like to thank the above organizations for partnering with WiS by hosting the regional roundtable series. We would also like to thank our WiS sponsors for their generosity and support.

For questions, please contact wis@sfindustry.org.

  Back to top

SFIG Positions

Are you or someone you know eager to join a supportive, hard-working and fun nonprofit team doing incredible work? Good news, SFIG has several openings! Please see the below job opportunities and help us spread the word by passing them along to anyone who might be a good fit:

  • Director of Education: will be responsible for development and execution of a comprehensive and robust in-person and online education and member development program. View additional information and apply here.
  • MBS/CMBS Policy Manager: will be an integral member of SFIG staff, providing support to the Director of Mortgage Policy. The successful candidate will support, contribute to the design of, and help execute group-wide strategy efforts and initiatives in support of SFIG’s advocacy, education, and policy priorities. View additional information and apply here.
  • Manager of Advocacy: Reporting to the Director of Advocacy, the Manager will be an integral member of SFIG staff, being second-in-command of the association’s Advocacy department. The successful candidate will design and execute advocacy strategies for SFIG’s policy priorities. The Manager will also support SFIG’s advocacy efforts through development and growth of its political action committee (“PAC”). View additional information and apply here.
  • Policy Analyst: will be an integral member of SFIG staff, providing support to Senior Director, ABS Policy. The successful candidate will help support policy initiatives, through direct member engagement, meeting facilitation, research and analysis. The position will also focus on providing support to SFIG’s Investor Committee and to the SFIG’s Head of Investor Relations. View additional information and apply here.

You can also follow our Twitter @SFIndustryG at https://twitter.com/SFIndustryG to stay updated on all SFIG job opportunities.

Industry Positions

Some of the latest industry positions available include:

Senior Manager, Securitization Platform: Liquidity and Funding Manager – 126543BR TD Bank 06-24-2016
Principal - Structured Product Group (RMBS) PGIM 05-04-2016
Director/Senior Director - Data and Operations Leader Fitch Ratings 05-03-2016
Director/Senior Director - Research and Criteria Leader Fitch Ratings 05-03-2016
Director/Senior Director - Asset Manager Leader Fitch Ratings 05-03-2016

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

For questions about positions at SFIG, please contact Jobs@sfindustry.org. For questions about the website jobs portal, please contact Website@sfindustry.org.

Current members are encouraged to advertise open positions within their company on SFIG's website by filling out the form here.

 Back to top

MONDAY, July 18, 2016
4:00 p.m. – 5:00 p.m. (ET)


TUESDAY, July 19, 2016
11:00 a.m. – 12:00 p.m. (ET)


TUESDAY, July 19, 2016
2:00 p.m. – 3:00 p.m. (ET)


THURSDAY, July 21, 2016
10:00 a.m. – 11:00 a.m. (ET)

Back to top 

MONDAY, August 1, 2016 – FRIDAY, August 5, 2016
Registration for WiS Week roundtables available here.

Back to top

SUNDAY, September 18, 2016
3:00 p.m. – 5:00 p.m. (ET)
Eden Roc Hotel, Ocean Garden
Miami Beach, FL

Registration forthcoming

Back to top

SUNDAY, September 18, 2016 – TUESDAY, September 20, 2016
The Fontainebleau
Miami Beach, FL
Registration available here.

Back to top

If you would like to participate in the work SFIG is undertaking through our committees as highlighted below, please e-mail Committees@sfindustry.org. 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 recently launched its “Best Practices” initiative to establish industry consensus and provide recommendations around one or multiple accepted approaches. The five established Best Practices work streams are 1) Data & Reporting 2) Representations & Warranties 3) Regulatory 4) Operational Considerations and 5) Enforcement.

The committee previously commented on the Treasury Department's Request for Input on Online Marketplace Lending on September 30th.

SFIG’s Student Loan Committee responded to Fitch’s proposed amendments to FFELP student loan ABS rating methodology earlier this year. The committee also submitted a response to the Proposed Changes to Moody’s Approach to Rating Securities Backed by FFELP Student Loans this past October.

To join SFIG’s Student Loan Committee and learn more, please contact Alyssa.Acevedo@sfindustry.org.

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; 3) Role of Transaction Parties; and 4) 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, please contact Amanda.Bateman@sfindustry.org.

SFIG, through its GSE Reform Task Force, along with several other trade associations, recently met with the FHFA, Fannie Mae and Freddie Mac to get an update on the transition to a Single Security issuance. The transition was characterized as moving ahead on schedule but with a lot of work still to do. The task force has formed policy positions on the Carney-Delaney-Himes GSE Reform bill, the PATH Act, and other GSE reform proposals. Please see the GSE Reform Legislative Comparison, which analyzes key provisions in the five most recent housing finance reform bills.

To join SFIG’s GSE Reform Task Force and learn more, please contact Amanda.Bateman@sfindustry.org.

The Mortgage Loan Level Disclosure Task Force will soon begin its review of the Mortgage Industry Standards Maintenance Organization’s (“MISMO”) work to map the data elements that lenders should deliver in securitizations per the recent Regulation AB II release of Schedule AL. The requirements will come into effect in November 2016, and SFIG has participated in weekly conference calls with MISMO for the last 18 months in an effort to standardize disclosure by that time. SFIG encourages subject-matter experts from member organizations to participate in its review—which will be conducted jointly by this task force and the RMBS 3.0 Due Diligence, Data and Disclosure Working Group—so the work can be adopted as an industry-wide standard.

Members interested in participating should contact Amanda.Bateman@sfindustry.org.

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 Alyssa.Acevedo@sfindustry.org to participate on the Task Force.

The Risk Retention Industry Guide Working Group launched its interim Industry Guide, ahead of the RMBS compliance date, focused on issues either relevant to all asset classes or specific to RMBS. The Working Group continues to work on a final guide focused on creating best practices and developing consensus positions around several areas within the Credit Risk Retention final rule.

Please contact Alyssa.Acevedo@sfindustry.org with any questions.

SFIG’s Chinese Market Committee completed their White Paper, A Comprehensive Guide to U.S. Securitization, in April for Chinese regulators and the Chinese Securitization Forum to educate them on the U.S. securitization landscape. The committee also continues to hold discussions with a focus on SFIG’s partnership with the CSF, 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 Alyssa.Acevedo@sfindustry.org.

The Regulation AB II Task Force has been focused on the disclosure and offering process requirements within the final rule. Asset specific work streams have been formed to develop comment letters on the outstanding proposals within the final rule and the Task Force submitted the first part of its comment letter in June of 2015. SFIG submitted a supplemental comment letter covering credit card and equipment floorplan asset classes on January 12, 2016 and another supplemental comment letter regarding asset-level information for student loans on June 15, 2016.  Future discussions across asset class committees and the Regulation AB II Task Force will focus on the remaining outstanding proposed rules, including potentially requiring issuers to provide the same disclosure for Rule 144A offerings as required for registered offerings.

SFIG members who are interested in joining this task force or asset specific committees should contact Alyssa.Acevedo@sfindustry.org

The Regulatory Capital and Liquidity Committee will be developing a comment letter to the U.S. proposed net stable funding ratio (“NSFR”) requirements. The committee also recently submitted comments to the Federal Reserve Board’s (“FRB”) proposal regarding Single-Counterparty Credit Limits, and before that, submitted a response to Basel’s Consultative Document regarding Capital Treatment for STC Securitisations. The committee will be addressing industry concerns related to the FRB’s Final Rule on the Liquidity Coverage Ratio (“LCR”). SFIG testified before Congress in February 2016, focusing on global regulatory issues, including LCR, that affect lending across all asset classes.

To become involved in SFIG’s advocacy on the final LCR or NSFR rules, please contact Alyssa.Acevedo@sfindustry.org.

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. In October 2015, the prudential regulators approved a Joint Final Rule on Swap Margin Requirements. In November 2015, the CFTC issued their final rule regarding margin requirements for uncleared swaps for swap dealers and major swap participants.

The High Quality Securitization ("HQS”) Task Force recently submitted a response to Basel’s Consultative Document regarding Capital Treatment for STC Securitisations. The task force previously 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. SFIG testified before Congress in February 2016, focusing on global regulatory issues, including HQS, which affect lending across all asset classes.

To join the HQS Task Force, please contact Alyssa.Acevedo@sfindustry.org.

Back to top

On Monday, July 11th, the Basel Committee on Banking Supervision (“BCBS”) announced the publication of an updated standard for the regulatory capital treatment of securitization exposures that includes the regulatory capital treatment for STC securitizations. This standard amends the BCBS's 2014 capital standards for securitizations, and the capital treatment for simple, transparent and comparable (“STC”) securitizations builds on the 2015 STC criteria.

The BCBS said that a “modest reduction” in capital should be allowed for bonds made up of lower-risk assets and that risk weight floors could be cut to 10 percent from 15 percent for the safest portion of the securities. The lower capital charges will apply to the senior-ranking portions of bonds backed by assets that meet regulators’ criteria for STC securitizations. The updated securitization framework will come into effect in January of 2018.

SFIG previously submitted a comment letter on the BCBS’s consultative document regarding capital treatment for STC securitizations and a response to the BCBS-IOSCO final criteria for identifying STC securitizations. If you would like to join SFIG’s High Quality Securitization Task Force or our Regulatory Capital & Liquidity Committee, please contact Alyssa.Acevedo@sfindustry.org.

Back to top

On Monday, July 11th, Representative Patrick McHenry (R-NC) introduced a bill entitled “Protecting Consumers’ Access to Credit Act of 2016” (H.R. 5724).

“Innovation in financial services has created more convenient and secure ways to meet the demands of American consumers," said McHenry. "For these to succeed, however, Washington must rethink its own laws and regulations to keep up with the growth and creativity in the private sector.”

According to a recent Wall Street Journal article, the bill calls for allowing debt buyers, including marketplace lenders, to charge the same interest rate as the banks that originated the debt.

The Supreme Court previously denied certiorari in Madden vs. Midland Funding. (Please see here for the amicus curiae brief SFIG had submitted in support of the cert petitioners in the case.) The Supreme Court's denial of certiorari has far reaching implications for the securitization of consumer loans, especially those funded through marketplace lending channels. Industry participants will need to evaluate the applicability of state usury laws for loans included in a securitization. Additionally, demand in the secondary market for marketplace loans above state interest rate caps in the Second Circuit is expected to remain modest given potential legal risks.

If you are interested in learning more about SFIG’s advocacy on this matter, or if you would like to join the Marketplace Lending Committee, please contact Jennifer.Wolfe@sfindustry.org.

Back to top

The Federal Housing Finance Agency ("FHFA") recently released An Update on Implementation of the Single Security and the Common Securitization Platform ("CSP"). The Update details the timeline of key achievements to date and describes the expected milestones that government sponsored enterprises (“GSEs”) Fannie Mae and Freddie Mac and Common Securitization Solutions ("CSS") expect to meet to achieve the stated goals for these projects.

Specifically, the FHFA’s 18-page report lists two milestones – a.k.a. releases – that would facilitate both GSEs’ implementation of the Single Security and Common Securitization Platform for the purpose of protecting consumers. Release 1 – the first milestone – simply introduces the use of the CSP as a vehicle for enhancing liquidity. Release 1 is limited to Freddie Mac. Release 2, whereby “Data Acceptance, Issuance Support, Disclosure, and Bond Administration” is mentioned, applies to both Fannie Mae and Freddie Mac.

The FHFA’s process for testing Fannie Mae and Freddie Mac’s CSP and CSS systems is pending completion, but the agency expects to finish both GSEs’ Release stages this year.

Back to top

According to a recent article in National Mortgage News, Freddie Mac is on track to issue MBS via the common securitization platform (“CSP”) by the end of this year. The article cites a report by the Federal Housing Finance Agency (“FHFA”) released last Thursday, July 7th, which included an updated timeline for the implementation of the CSP and an update on progress to-date. Fannie Mae is not expected to begin using the CSP until 2018.

The creation of the CSP is part of an initiative recently launched by FHFA, which also involves the development of a single security that both government sponsored enterprises ("GSEs") will issue. The single security’s features are based on those of Fannie Mae’s MBS. Both GSEs have been working to align their policies to facilitate the transition to the launch of the CSP and use of the single security. According to FHFA Director Mel Watt, the CSP and single security "should improve the overall efficiency and liquidity of the mortgage market and result in tremendous savings to taxpayers."

Back to top

Presumptive Democratic presidential nominee Hillary Clinton announced her policy goals for technology and innovation, including public service blockchain applications, last week.

“We must position American innovators to lead the world in the next generation of technology revolutions – from autonomous vehicles to machine learning to public service blockchain applications – and we must defend universal access to the global, digital marketplace of ideas.”

According to a recent CoinDesk article, the Clinton campaign also indicated that there will be a push for reduced regulatory barriers for startups and entrepreneurs by challenging state and local governments to identify, review and reform legal and regulatory obligations that protect legacy incumbents against new innovators.

If you would like to join SFIG’s Blockchain Task Force, please contact Alyssa.Acevedo@sfindustry.org.

Back to top

Last Wednesday, July 6th, North Carolina passed the North Carolina Money Transmitters Act, updating its money transmission statute to clarify the rules for digital currency startups, according to a recent American Banker article.

The updates effectively helped define what the state considers monetary value, including "virtual currency," according to a news release from the Chamber of Digital Commerce, who worked with North Carolina’s banking commissioner and General Assembly to help shape a more “business-friendly” policy. Under the new law, business-to-business transactions are largely exempt from the statute, which is geared toward money transmission activity for "personal, family, or household purposes."

Back to top

In the wake of post-Brexit changes in European Union (EU) leadership, the EU is requesting that global regulators take a fresh look “to ease key elements of a planned rule revamp, including leverage and liquidity standards,” according to a Bloomberg article quoting Jonathan Hill, the EU’s Commissioner for financial services at the Capital Markets Union. The European Commission will write to Mario Draghi to “ask for these issues to be looked at again,” according to a draft speech that was distributed by Hill’s office.  Hill, who was appointed by David Cameron to his post less than 2 years ago, said “there is a risk to over-regulation of the financial industry”. He is leaving the job “after concluding he couldn’t carry on in his role following Britain’s vote last month to secede from the EU.”  

Finance ministers in the EU called on Tuesday “for the Basel Committee to take care as it wraps up work on the Basel III framework so that overall capital requirements don’t rise significantly” and to avoid “differences for specific regions of the world.” In Hill’s speech, he said that the “Basel Committee […] should weigh easier constraints on banks’ leverage and derivatives clearing, and determine whether rules have damaged liquidity in corporate bond and other markets.”

Back to top

Last Thursday, July 7th, the Federal Reserve formally announced an extension of the conformance period for the Volcker Rule until July 21, 2017 “for banking entities to divest ownership in certain legacy investment funds and terminate relationships with funds that are prohibited under the  rule.” In December of 2014, the Fed said that it would make this extension to “provide for orderly divestitures and to prevent market disruptions.” This is the final of the three 1-year extensions that the agency is authorized to grant.

If you would like to join SFIG’s Volcker Task Force, please contact Alyssa.Acevedo@sfindustry.org.

Back to top

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

Dan Goodwin Director, Mortgage Policy

Tom McCrocklin Director, Advocacy

Jennifer Wolfe Manager, ABS Policy

Hua Liu Communications & Social Media Manager

Alyssa Acevedo Senior Analyst, ABS Policy

Amanda Bateman Senior Analyst, MBS Policy

Marshall Bornemann, Policy Analyst

Robert Robilliard, Data and Policy Analyst

Jennifer Serpas Office Manager

Sarah Clarke Events Coordinator

Dani Hernandez Executive Administration

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

Structured Finance Industry Group
WebsiteEmail Us | Web Archive
Terms and Conditions | Privacy Policy