July 20, 2016 Newsletter
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July 20, 2016

Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


As announced last week, SFIG’s Women in Securitization (WiS) initiative is excited to hold 10 regional roundtable events in seven cities from August 1st – 5th. A video presentation and other materials will deliver attendees instruction, resources, and tools on the topic of “Negotiating for Yourself.”

WiS Week events are taking place in Charlotte, Chicago, Houston, Los Angeles, New York, Toronto, and Washington D.C. – please click here to register for an event in your city.

Please note that as content is the same at each roundtable, we ask that you register for only one event.

Due to limited capacity at each location, we are prioritizing registration for women. WiS looks forward to welcoming men to our next event at ABS East on September 18th.

SFIG thanks the hosting organizations for WiS Week, and extends gratitude to our WiS sponsors for their generosity and support.

For questions, please contact wis@sfindustry.org.

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On Thursday, July 14th, SFIG Director of Mortgage Policy, Daniel Goodwin, testified before the Treasury Department and Internal Revenue Service regarding proposed regulations under Section 385 of the Internal Revenue Code and their impact on securitization markets. Mr. Goodwin specifically cited the potential consequences of the proposed regulations’ “Funding Rule,” which could cause certain notes to be recharacterized as stock, among other adverse consequences, when holders are simply providing ordinary market stabilizing activity.

In addition to his remarks on the proposed regulations’ Funding Rule, Mr. Goodwin observed that the proposed regulations are overly broad and could create unintended consequences for the real economy. He argued that “among other concerns, the risk of adverse tax consequences would significantly reduce liquidity, erode investor confidence, and disrupt the capital markets, inevitably reducing liquidity in the market place.” The proposed section 385 regulations are part of a large package of proposed tax regulations meant to combat so-called “inversion transactions.”

SFIG's Tax Policy Committee submitted a comment letter on July 6th to the IRS regarding the proposed income tax regulations under Section 385. For questions about the letter or testimony, please contact Daniel.Goodwin@sfindustry.org. To join SFIG’s Tax Policy, please contact Marshall.Bornemann@sfindustry.org.

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According to a recent National Mortgage News article, SFIG has helped resolve many of the ambiguities associated with the Truth in Lending (TILA) – Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure (TRID) rules thanks to the publication of its RMBS 3.0 TRID Compliance Review Scope© documentation on June 15th. The article notes that turn times increased significantly when TRID first went into effect in October, because aggregators who typically buy the loans were taking more time to review files. However, as a result of SFIG’s TRID documentation—which aims to standardize how third party review firms diligence loans—there is less ambiguity in the market and improved liquidity.

The CFPB is expected to issue a Notice of Proposed Rulemaking at the end of July which market participants hope will also reduce ambiguity around TRID. For questions about the TRID documentation and SFIG’s engagement with the CFPB, please contact Daniel.Goodwin@sfindustry.org. To join any of SFIG’s RMBS Due Diligence, Data and Disclosure Working Group and contribute to this work, please contact Marshall.Bornemann@sfindustry.org.

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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:

Analyst/Associate Director - Asset Backed Securities Fitch Ratings 07-15-2016
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.

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  • THURSDAY, July 21, 2016
    10:00 a.m. – 11:00 a.m. (ET)
  • THURSDAY, July 28, 2016
    10:00 a.m. – 11:00 a.m. (ET)
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TUESDAY, July 26, 2016
2:00 p.m. – 3:00 p.m. (ET)

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WEDNESDAY, July 27, 2016
2:00 p.m. – 3:00 p.m. (ET)

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TUESDAY, August 2, 2016
11:00 a.m. – 12:00 p.m. (ET)

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

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

Registration forthcoming

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

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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 Marshall.Bornemann@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 Marshall.Bornemann@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 Marshall.Bornemann@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.

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Last week, Verizon Wireless issued the first US rated ABS backed by cellphone contracts. The $1.169 billion deal paves the way for a new asset class in the ABS market, according to a recent Reuters article.

With the recent trend of monthly payment plan models in the cellphone industry, the major mobile carriers have huge inventories of contracts ripe for securitization, Reuters explains.

Last February, Moody's Investors Service discussed the unique risks and strengths of ABS backed by mobile phones and said that the phone contract sector could potentially grow into an ABS asset class worth tens of billions of dollars.

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On Tuesday, July 12th, Republicans adopted a draft party platform which proposes significant changes to the country’s housing finance system and also calls for reinstating the Glass-Steagall Act of 1933.

According to a recent Wall Street Journal article, the document calls for GSEs, Fannie Mae and Freddie Mac, to be dismantled. Additionally, it proposes more robust underwriting standards for home mortgage lenders. The draft also takes aim at the Consumer Financial Protection Bureau, classifying it as a “rogue agency” and arguing that it too should be unwound.

The document expresses that the Party’s “goal is to advance homeownership while guarding against the abuses that led to the housing collapse.” The platform goes on to say the government “must scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders, and avoid future taxpayer bailouts.”

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Risk retention requirements are harming the CMBS industry, according to the American Banker in a recent article. The article highlights industry concerns that the risk retention requirements “may be the proverbial straw that breaks the back of the commercial mortgage-backed securities market.”

The article notes reporting from Wells Fargo Securities that issuance in the market has fallen to its lowest levels since 2009. 

Legislation introduced by Representative French Hill (R-AK) is cited in the article as a potential “legislative fix” being pursued by some industry representatives. The bill is described as softening the 5% risk retention requirement. The article notes that the legislation has been approved by the House Financial Services Committee, “but has gained little traction in the Senate.”   

For questions about risk retention and SFIG’s Congressional outreach, please contact Daniel.Goodwin@sfindustry.org or Thomas.McCrocklin@sfindustry.org. Please contact Alyssa.Acevedo@sfindustry.org to join SFIG’s Risk Retention Task Force and Marshall.Bornemann@sfindustry.org to join SFIG’s CMBS Committee.

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Last Thursday, July 14th, Representatives Adam Kinzinger (R-IN) and Tony Cardenas (D-CA) introduced a non-binding resolution in the U.S. House of Representatives. The resolution calls for the development of “a national policy for technology” that would include digital and blockchain technology, according to a recent CoinDesk article.

The resolution also states that blockchain technology has the potential to “fundamentally change” how trust and security are established in online transactions. It also highlights how alternative currencies are “leveraging technology” to increase transparency in ways that can replace the “decades-old payment technology” used by financial institutions.

"The US should develop a national policy to encourage the development of tools for consumers to learn and protect their assets in a way that maximizes the promise customized, connected devices hold to empower consumers, foster future economic growth, create new commerce and new markets,” according to the resolution. It has been initially welcomed from advocates of technology working on Capitol Hill, according to CoinDesk.

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According to a recent American Banker article, financial services industry participants must be forthright and collaborative when aiming to use blockchain technology to change their business in order to avoid spending years and vast amounts of money testing prototypes. As American Banker explains, industry standards promote an equal competitive playing field and reduce new technologies’ time to market.

Many industry projects are already focusing on the standardization of data flows and the language used to communicate with blockchains rather than a technology platform.

If you are interested in joining SFIG’s Blockchain Task Force, please contact Alyssa.Acevedo@sfindustry.org.

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The Bank of England (BoE) recently released a staff working paper entitled “The Macroeconomics of Central Bank Issued Digital Currencies” which discusses the consequences of a central bank making a digital form of cash available to the general public.

According to a recent Blockchain News article, the paper models a partial Sovereign Money System in which anyone can hold their money in the form of risk-free digital cash created by a central bank only when it purchases bonds from households or investors. The paper does not consider what would happen if the central bank created digital cash to finance government services or tax cuts, although it notes these questions for future research.

Some of the key benefits of digital currencies that are highlighted in the paper include: boosting the GDP by around 3 percent due to “reductions in real interest rates, in distortionary tax rates, and in monetary transaction costs…"; creating a second monetary policy tool for central bankers to stabilize the economy; and improving financial stability.

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The Consumer Financial Protection Bureau (CFPB) has announced that it will hold a field hearing on July 28, 2016 in Sacramento, CA on the topic of debt collection. The hearing will include remarks by CFPB Director Richard Cordray and testimony from consumer groups and members of the public. The Bureau commonly announces new policy proposals and requests for comment at such events.

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On Monday, July 18th, an article in Mint reported eight Indian microfinance institutions (MFIs) are looking towards securitization as a means of complying with new Reserve Bank of India (RBI) rules, as they transition to becoming small finance banks (SFBs).

In September of 2015, the RBI granted in-principle licenses to eight MFIs to become SFBs. As part of this transition RBI banking rules stipulate that MFIs will need to move away from the current model of financing through bank loans to one which relies on deposits to fund their microfinance lending practices. In an effort to make this switch, several leaders from the MFI industry have identified securitization of loan pools as a tool for freeing up capital during the transition.

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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

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