June 8, 2016 Newsletter
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June 8, 2016

Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


On Saturday morning SFIG staff, aka Team Reggie, will be walking in Washington D.C.’s Purple Stride, as we “wage hope” against pancreatic cancer – the deadly disease that took our leader away from us too early. We are grateful to everyone who has supported this effort and helped us raise over $11,000 so far. Thank you!

If you haven’t yet taken the opportunity and would like to support your SFIG team, please go to http://purplestride.kintera.org/dc/teamreggie and make a donation.

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Last Friday, June 3rd, SFIG submitted a comment letter, drafted by Chapman and Cutler LLP, to the Federal Reserve ((“FRB”) proposal regarding Single-Counterparty Credit Limits ("SCCL") for Large Banking Organizations. The SCCL proposal has the potential to impose a substantial compliance burden on issuers of ABS, as a result of the "look-through" provisions that are proposed to apply to securitization special purpose vehicles.

The comment letter was a combined effort by both SFIG’s Regulatory Capital & Liquidity Committee and ABCP Committee. If you are interested in joining these committees, please contact Alyssa.Acevedo@sfindustry.org.

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SFIG Positions

With SFIG continuing to expand its reach across new conferences and additional policy challenges, we are looking for additional talent.

If you are smart, hard-working, enthusiastic, and want to be part of a growing organization in a fun and supportive environment, please contact us at jobs@sfindustry.org or visit our website at www.sfindustry.org/jobs.

Opportunities exist for a variety of experience sets, ranging from Policy Analyst to Advocacy Manager. We look forward to hearing from you!

Industry Positions

Some of the latest industry positions available include:

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
Enterprise Sales T-REX 03-10-2016

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, June 9, 2016
2:30 p.m. – 3:30 p.m. (ET)


FRIDAY, June 10, 2016
11:00 a.m. – 12:00 p.m. (ET)


MONDAY, June 13, 2016
2:00 p.m. – 3:00 p.m. (ET)


TUESDAY, June 14, 2016
11:00 a.m. – 12:00 p.m. (ET)


THURSDAY, June 16, 2016
10:00 a.m. – 11:00 a.m. (ET)

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TUESDAY, June 14, 2015 – THURSDAY, June 16, 2016
The Barcelona International Convention Centre
Barcelona, Spain
Registration available here.

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TUESDAY, June 28, 2016
12:00 p.m. – 5:00 p.m. (ET)
Morgan, Lewis and Bockius LLP
New York, NY
Note: Closed Meeting

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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 recently responded to Fitch’s proposed amendments to FFELP student loan ABS rating methodology. 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, 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.

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

The Risk Retention Industry Guide Working Group recently 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 recently completed their White Paper, A Comprehensive Guide to U.S. Securitization, 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 this past June. SFIG submitted a supplemental comment letter covering credit card and equipment floorplan asset classes on January 12, 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 a response to Basel’s Consultative Document regarding Capital Treatment for STC Securitisations and will be addressing industry concerns related to the Federal Reserve Board’s Final Rule on the Liquidity Coverage Ratio (“LCR”). SFIG recently testified before Congress, 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 recently testified before Congress, focusing on global regulatory issues, including HQS, that affect lending across all asset classes.

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

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Central bank officials from around the world gathered to explore blockchain technology at a Federal Reserve event last week. According to a recent American Banker article, Federal Reserve Chair Janet Yellen encouraged her fellow central bankers at this event to accelerate their studies of new financial technologies, specifically mentioning bitcoin, the blockchain, and other distributed ledgers.

Other central bank leaders expressed a broad interest in how the technology might impact both the banks they regulate as well as their own regulatory practices, according to a recent CoinDesk article.

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

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According to a recent Bloomberg article, the New York Department of Financial Services has ordered 28 online lenders to disclose whether they offer loans to New York state residents along with a description of the types of financing they provide. The New York regulator also reminded firms that they need to have a New York state license to provide certain types of loans in New York.

Meanwhile, in the U.K., the Chairman of the Treasury Committee in Britain's Parliament, Andrew Tyrie, has asked the Bank of England and the Financial Conduct Authority ("FCA") to determine if more protections with regard to peer-to-peer lending were needed for consumers. According to a recent Reuters article, Parliament will also be checking whether platforms need more capital to withstand downturns.

"The committee is concerned to ensure that the FCA is paying due attention to the risks – and the opportunities – afforded by the growth of peer-to-peer lending and related markets," Tyrie said in a statement on Wednesday.

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On Tuesday, June 7th, House Financial Services Committee Chairman Jeb Hensarling (R-TX) unveiled his plans for a proposed legislative overhaul of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act during a speech to the Economic Club in New York.

According to an executive summary issued by the House Financial Services Committee, the proposal would “end taxpayer-funded bailouts of large financial institutions; relieve banks that elect to be strongly capitalized from ‘growth-strangling regulation’ that slows the economy and harms consumers; and impose tougher penalties on those who commit fraud as well as greater accountability on Washington regulators.”

As reported in the Wall Street Journal, the bill would effectively let banks opt into the alternative plan in lieu of current post-crisis regulatory regime if they can surpass critical thresholds, including a 10 percent leverage ratio. According to Chairman Hensarling, banks that choose to qualify for regulatory relief by meeting this requirement will be “significantly better capitalized than Dodd-Frank or any U.S. or global regulator currently requires,” as U.S. prudential regulators require a six percent leverage ratio for those considered globally systematically important and Basel only requires 3 percent. As Hensarling explained, “for banks willing to put their investors in front of hardworking taxpayers in the event of a failure, the Republican plan will free banks to help more Americans finance their individual American dreams.”

The proposal also speaks to a number of other Dodd-Frank related topics, ranging from Consumer Financial Protection Bureau and Financial Stability Oversight reform, to enhanced SEC fines and penalties for financial fraud and self-dealing. The White House, Ranking Financial Services Committee Member Maxine Waters (D-CA) and Senate Banking Committee member Elizabeth Warren (D-MA) have publically criticized the proposal. SFIG will continue to monitor this proposal as it matures in the process and develop guidance as needed.  

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Chinese RMBS are performing well in their early stages, according to Fitch Ratings. This is attributed partly to the "vanilla" mortgage features within the transactions issued to date, which reflects strong transparency standards.

There have been 12 transactions across eight different commercial banks to date in the market, amounting to RMB28.03bn (USD4.28bn). Among the 12 deals, 10 are not sufficiently seasoned to produce significant data, but the agency's initial observations have identified a steady performance across the board.

Meanwhile, the agency notes a total RMB95.7bn (USD14.7bn) in structured finance deals priced in 1Q16, 53 percent of which was under the Chinese Credit Asset Securitization (CAS) scheme. This was an 11 percent year-on-year drop for the CAS issuance, resulting from the decline of CLO issuance due to lower growth and corporate funding needs across China.

However, RMBS and auto loan ABS grew steadily in the quarter, along with two consumer loan ABS deals. The highest default rate from all auto loan ABS issues has reached approximately 1.4 percent, compared to 1 percent for all RMBS issues.

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According to an article in National Mortgage News, CMBS delinquency rates increased for the third consecutive month in May after experiencing declines earlier in the year. The article cites data from Trepp, which showed the overall U.S. CMBS delinquency rate rose 12 basis points from April to 4.35 percent. Seriously delinquent loans, including those that are more than 60 days delinquent or in foreclosure, rose 11 basis points from the previous month to 4.24 percent. Compared to last year, the CMBS delinquency rate is now 105 points lower.

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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

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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