July 8, 2015 Newsletter
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July 8, 2015

SFIG Calendar

Advocacy Outlook

Industry News Highlights

Upcoming Events in Washington


This morning, Fannie Mae, Freddie Mac (“GSE’s”), and Common Securitization Solutions, LLC jointly announced that SFIG will participate in its newly created Industry Advisory Group to provide feedback and share information on efforts to build the Common Securitization Platform (“CSP”) and implement the Single Security.

SFIG's Executive Director, Richard Johns, stated:

SFIG is delighted to be invited to participate in the Industry Advisory Group, and has been supportive of its creation since our first comment letter to the Federal Housing Finance Agency (“FHFA”) on these initiatives. Such an alignment of interests among Congress, the industry, the FHFA and the GSEs will ensure that each stakeholder has the ability to voice their opinions throughout the entire development process of the Single Security and CSP.

In addition to SFIG, participants in the Industry Advisory Group will come from:

  • American Bankers Association
  • Financial Services Roundtable
  • Fixed Income Clearing Corporation
  • Independent Community Bankers Association
  • Mortgage Bankers Association
  • Securities Industry and Financial Markets Association
  • The Center for Responsible Lending

To view the press release, please click here. To learn more about the CSP and Single Security initiatives, please click here. For questions regarding SFIG’s participation in the Industry Advisory Group, please contact Michael.Flood@sfindustry.org.


In recognition of the women of structured finance, SFIG is celebrating Women in Securitization (“WiS”) Week, August 13-20. WiS is committed to overcoming the factors that impede the growth of women in our industry, and we are proud to present a week of programming and events devoted to furthering the success of female professionals in structured finance.

WiS Week will feature a series of regional roundtables, share profiles of leading industry women, and provide opportunities to get to know and support your female colleagues.

We are thrilled to announce regional roundtables in the following cities:

  • Thursday, August 13: New York City
  • Tuesday, August 18: Washington, DC
  • Wednesday, August 19: Chicago
  • Thursday, August 20: Charlotte and Toronto

As women represent an ever-increasing share of the global workforce, corporate culture has been slow to fully adopt and implement policies and programs that help female employees achieve their full potential and contribute fully to the success of their employers. Through these roundtables, our industry women will share their experience and thought leadership to work towards advancing actionable ideas and solutions to help empower not just the women of SFIG, but also the structured finance industry as a whole. 

Additional details and registration for WiS Week Roundtables is forthcoming, so stay tuned!

If you are not yet part of this exciting SFIG initiative, register for Women in Securitization here.

Contact WiS@sfindustry.org for additional information.

THURSDAY, July 9, 2015
10:00 a.m. – 11:00 a.m. (ET)
FRIDAY, July 10, 2015
11:00 a.m. – 12:00 p.m. (ET)
MONDAY, July 13, 2015
2:00 p.m. – 3:00 p.m. (ET)
TUESDAY, July 14, 2015
4:00 p.m. – 5:00 p.m. (ET)
WEDNESDAY, September 16, 2015 – FRIDAY, September 18, 2015
The Fontainebleau
Miami Beach, FL
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 Committees@sfindustry.org. For specific inquiries on any of SFIG’s advocacy efforts, please contact the staff member listed for the related project.

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 spring of 2015 and (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 Mary.Robinson@sfindustry.org.

The GSE Reform Task Force is reviewing the FHFA’s update to the single security initiative and preparing a response to the agency. 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. SFIG staff previously summarized members’ recommendations on the former in a briefing book, and plan to produce a similar book on the latter in the upcoming months. Additionally, the task force has been actively engaging the Federal Housing Finance Agency on several fronts, with comments submitted 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 Amanda.Bateman@sfindustry.org.

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 Alyssa.Acevedo@sfindustry.org 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 Amanda.Bateman@sfindustry.org 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 Alyssa.Acevedo@sfindustry.org 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 Alyssa.Acevedo@sfindustry.org.

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 Amanda.Bateman@sfindustry.org.

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 Alyssa.Acevedo@sfindustry.org.

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 Alyssa.Acevedo@sfindustry.org.

The Derivatives in Securitization Task Force recently 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 Amanda.Bateman@sfindustry.org.

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 Alyssa.Acevedo@sfindustry.org.

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 Amanda.Bateman@sfindustry.org.


Yesterday, July 7th, the European Banking Authority (“EBA”) released the full text of its advice to the European Commission (“EC”) on a European framework for qualifying securitizations. Accompanying the opinion is a report which details the analysis carried out to develop the EBA’s different recommendations. The documents’ publication follows the release of a summary presentation on the EBA’s recommendations to the EC on criteria for simple, standard and transparent securitization which SFIG reported on in last week’s newsletter.

The EBA notes its proposed requirements are intended to result in a more risk-sensitive approach to capital regulation for long-term securitization instruments and for ABCP. According to its announcement, “the report illustrates how the capital charges foreseen in the newly published revision of the Basel securitization framework should be lowered so as to recognize the relative lower riskiness of qualifying products, while always keeping regulatory capital within the perimeter of a prudential surcharge.”

SFIG has engaged in advocacy on this subject via its High Quality Securitization (“HQS”) Task Force. To read SFIG’s comment letters to the EBA, EC and other regulatory bodies on HQS, click here. To sign up for the HQS Task Force and contribute to this effort, please contact Amanda.Bateman@sfindustry.org


According to a recent Bloomberg article, the European Central Bank (“ECB”) maintained its steady pace of asset purchases last month in order to counter expected lower liquidity in the region’s summer vacation period.

The ECB bought €63.2 ($69.7) billion of public and private debt under its quantitative-easing (“QE”) program which included €51.4 ($56.8) billion of government and agency bonds, €10.2 ($11.3) billion of covered bonds, and €1.59 ($1.7) billion of ABS.

QE started in March with a purchase target of €60 ($66.5) billion per month of government and agency bonds, covered bonds and ABS. Eligible debt was expanded last week to include the debt of some state-backed companies.

The article states that policymakers intend to run the QE program until September of 2016, or until they determine that the eurozone inflation rate is back on track toward their goal of less than 2 percent. 


As reported by National Mortgage News, the Federal Housing Finance Agency’s (“FHFA”) annual report to Congress on single-family guarantee fees (“g-fees”) found that the shrinking gap between g-fees paid by large and small lenders to Fannie Mae and Freddie Mac ( “GSEs”) is increasing the share of mortgages sold to the GSEs by small originators. The FHFA report notes that from 2009 to 2014, g-fees have increased 250 percent to an average of 58 basis points, while at the same time small lenders “paid slightly less to guarantee a loan in 2013 and 2014 than did large lenders” on an equivalent risk adjusted basis. As a result, smaller non-bank lenders are increasingly selling their loans to the GSEs, where they can also retain the loan servicing. 


As reported by SFIG in July of last year, the Office of the Comptroller of the Currency (“OCC”) warned of risky lending practices by banks and auto finance companies in its Spring 2014 Semiannual Risk Perspective. The bank regulator is flagging similar concerns in its Spring 2015 Semiannual Risk Perspective, which covers the second half of 2014. The report notes, “examiners have observed weak underwriting standards for syndicated leveraged loans, as well as loosening of standards and increased laying of risk in other types of loan products, such as indirect auto lending, asset-based lending, [commercial real estate (“CRE”)] lending, and [commercial and industrial (“C&I”)] lending.”

According to a related article by the Wall Street Journal, this is the second time in nine months that the OCC has raised concerns about auto-lending standards.

THURSDAY, July 9, 2015
10:00 a.m. (ET)
2128 Rayburn House Office Building

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 Director of ABS Policy

Michael Flood Director of Advocacy

Mary Robinson Policy Manager

Alyssa Acevedo Policy Analyst

Amanda Bateman Policy Analyst

Daniel Tees Policy Analyst

Jennifer Serpas Office Manager

Allison Creswell Executive Administration

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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