March 23, 2016 Newsletter
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March 23, 2016

As if the structured finance industry did not have enough problems in the Winter of 2013, with the financial crisis still fresh and the Dodd-Frank reforms beginning to take hold, a different set of problems began to spill out into the open from an unexpected source. The industry’s own trade association – the organization established to provide industry leadership, best practices and a bridge to policymakers – began to unravel.

In response, a group of eight senior leaders from the industry – the Path Forward Committee – began to address the situation. After weeks of investigation, negotiation, and discussion, this group came to the conclusion that the situation could not be salvaged, and the decision was made to start fresh with a new organization.

All of the members of that group were, at the time, terrified at the prospect of failure. To try, and to fail, would have been a very damaging result, demonstrating to the broader business community and to Washington that the structured finance industry was in disarray and could not govern itself.

One member of that group recalls an incident during those days when he was speaking with another group member, Reggie Imamura of PNC Bank. Reggie stated simply that “failure is not an option here”.


On the morning of February 29th, SFIG Executive Director Richard Johns announced at SFIG’s 2016 Vegas conference, attended by over 6,000 delegates and the largest capital markets conference ever held, that Reggie Imamura, SFIG’s first Chairman, had died during the night.

Failure, in fact, may very well have been an option, if not a likelihood, but it was not the result. Although the efforts of many turned what was a risky course of action into a success, the efforts of Reggie Imamura in many ways stand alone.

It has been said of Lyndon Johnson that he believed that if you try hard enough – if you do absolutely everything you can to accomplish your goal – you will succeed. Reggie Imamura was cut from the same cloth.


When Reggie was into something, he was all in; his powers of self-discipline were remarkable. He had a passion for skiing, which translated into an idea that, in retirement, he would become a ski instructor. This led him to procure a ski instructor’s manual to take with him on ski vacations, turning every vacation into a step towards reaching that goal – and that, as far as he was concerned, only added to the fun.

It was the same with his other great athletic passion, sailing. Yes, it was relaxing, but a large part of the satisfaction came from his desire to master it.

An arguable exception to Reggie’s self-discipline may have been his driving habits. As driving instructor to his younger brother and daughters, he preached the value of defensive driving. However, anyone who was ever a passenger in the car with Reggie at the wheel would find that “do as I say, not as I do” held true when it came to Reggie’s personal driving style.


Coping with difficult situations was a specialty of Reggie’s. Among these situations was managing PNC’s asset-backed exposures following the financial crisis. He piloted the wind down of all positions in PNC’s ABCP conduit, Market Street Funding, incurring in the process not a dollar of loss, not even a dollar of impairment. He was especially proud of what his team accomplished with PNC’s CLO book.

When, as member of the Path Forward Committee, he reluctantly realized that the industry needed to take its advocacy organization in a different direction, he became passionate about “getting it right”, and he turned to it with the same energy and focus he brought to Market Street.

Determined that the new organization be comprised “not just of a bunch of investment banks”, he made investor acceptance his primary goal. He didn’t just call the principal investors – he visited many of them personally. And he did the same with other categories of members. And in April and May of 2013, it all started to come together.

As he became more involved with the effort to establish SFIG, it became apparent to the core members of the team that he was the right guy to serve as the initial Chairman, which in some ways was an unfamiliar role for Reggie. Those who knew him best refer to him as being by nature a “behind the scenes guy”, the kind of guy who would rather just get the job done, and not feel the need to be the center of attention. So, in some ways, serving in a publicly visible role as SFIG Chairman would not be a natural thing for Reggie to have done. But he saw that he needed to do it, and he did it.


In addition to not wanting to be the center of attention, Reggie had a life-long aversion to appearing needy, a trait which kept him upbeat and focused throughout his illness. This characteristic was demonstrated early on, when an ill-fated attempt as a boy to build a backyard treehouse with his brother led to two broken arms. It was a great indignity for Reggie to have to rely on his little brother to help feed him during his recovery.


His last public SFIG appearance was at the SFIG Board Dinner and the following Holiday Dinner in New York on December 9, 2015. He announced his illness to the Board during the meeting.

A “sushi hound”, he had hoped to visit that day with some of the Board members at his favorite spot, Sushi Yasuda on 43rd Street, but time ran out, and it didn’t happen.


In January of 1986, at an undergraduate party of Chapel Hill, he was told by a friend to “come over here – this girl is dying to meet you!”. He came over and responded “I have been dying to meet her too.”

Reggie and Lisa were together as a couple since that night. They married in 1988. Once he made up his mind about something, he stayed with it. They have two daughters, Natalie and Sophie.


In December, when he realized how sick he was, he began to write thoughts to his daughters in a journal. At Reggie’s memorial service, his daughter Sophie shared with the group one of those journal messages from Reggie:

I appreciate how this is a difficult time in general – elections, constant political battles and all these health challenges. It is so easy to be overwhelmed with cynicism and for people to feel argumentative and frustrated that no one is respectful to listen, discuss points (vs. sound-bites).

The one point of advice that I feel strongly needs to be raised, is the need to manage your reaction to what people say. It can be easy to roll your eyes or give personal/facial/body gestures immediately. People will notice and remember facial/body gestures. If people believe your reactions reflect dismissal of their view, you will have a hard time winning them over. If, on the other hand, they think they can explain their position to you it will lay a solid foundation for your reputation and relationships. You have so much to offer people in the years to come. Your exceptional communication skills (writing/composition) will provide a powerful platform for you to make a difference, increase awareness, and direct/influence how people think.

At the reception following the memorial service, some of his friends remarked that Reggie’s message to his daughters was equally relevant to the industry in which he spent his working life. It was suggested that too often, perhaps, we, whether issuer, investor, banker, lawyer, rating agency, regulator, whatever, can dig into our positions, and act dismissive to the others – often to the detriment of the industry, if not to the economy.

One person even thought that Reggie’s message would make a fine mission statement for SFIG.


Our champion has brought us a long way from the Winter of 2013. Perhaps he can continue to guide us as our “behind the scenes guy” and continue to “make a difference, increase awareness and direct/influence” how we think. 


Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


A recent report from Fitch Ratings provides positive commentary on SFIG’s draft proposal to standardize the approach to the scope of review for exceptions under the Truth in Lending Act – Real Estate Settlement Procedures Act Integrated Disclosure rules (“TRID”). “Initial due diligence sampling of prime jumbo mortgages in the secondary market has indicated many compliance issues thus far, most of which appear to be good faith errors. The ambiguity in the rule and a lack of judicial precedent has caused uncertainty on how to assess the materiality of the errors and how to resolve them,” stated the Fitch report.

As reported on Friday, participants of SFIG’s RMBS 3.0 Due Diligence and Data Disclosure work stream, particularly the third-party review firms, distributed the draft proposal for comment regarding a standardized approach to the scope of review for exceptions to TRID rules, consistent exception grading, and consistent remediation considerations. Over the next few weeks, SFIG members expect to vet the proposal through the committee process and incorporate the final product into the RMBS 3.0 Green Papers.

SFIG would highlight that this proposal is an attempt to standardize a response to outstanding compliance issues under TRID at this early juncture and expressly assumes that regulators and courts will interpret TRID in accordance with the principles of liability set forth in a letter from Richard Cordray, the Director of the CFPB (the “Letter”); however, it is critical to note that there is no guarantee the exception grading and remediation reflects how courts and regulators, including the CFPB, may actually interpret and/or enforce the rules as written, and that they may do so in a manner that is contrary to the statements and position of the Letter. Furthermore, when asked, the CFPB has refused to state formally that it will abide by the Letter.

This proposal serves only to explain how the member firms would grade risk and recommend resolving TRID violations IF the CFPB and the courts enforce the rules in a manner consistent with the Letter.

A conference call has been scheduled for Tuesday, March 29th for RMBS 3.0 members to learn more about the proposal from the third party review firms that were instrumental in its drafting. To join the call or any of SFIG’s RMBS 3.0 working groups, please contact

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Last Thursday, March 17th, SFIG submitted comments, drafted by Alston & Bird, to the Basel Committee on Banking Supervision (“BCBS”) regarding the “identification and measurement of step-in risk.” SFIG’s letter provided comments on the BCBS Consultative Document. According to the BCBS, they are looking to “help industry and regulators develop an approach for identifying, assessing and addressing step-in risk potentially embedded in banks’ relationships with ‘shadow banking’ entities.”

If you would like to join SFIG’s Regulatory Capital and Liquidity Committee, please contact

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SFIG currently has open positions for:

  • Advocacy 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 and support the association’s advocacy efforts through development and growth of its political action committee. Additional information on the position, as well as a link to the application, is available here.

  • Data/Policy Analyst: will help support group-wide strategy efforts and initiatives as they relate to the association’s database and various policy requirements. The Analyst will also support SFIG’s advocacy efforts through development of a political action committee database. 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:

Enterprise Sales T-REX 03-04-2016
Associate Director/Director - Structured Finance - Model Management Fitch Ratings 02-29-2016
Research Analyst PeerIQ 02-25-2016
Credit Quant PeerIQ 02-22-2016
Mid-Level Corporate Trust Associate K&L Gates LLP 02-22-2016
Senior Analyst, Consumer ABS Kroll Bond Rating Agency 02-04-2016
Analyst, Financial Institutions Kroll Bond Rating Agency 02-03-2016
Associate Director, Structured Finance - Toronto Standard & Poor's 01-29-2016

Attorney- Project Finance/Corporates

Kroll Bond Rating Agency 01-28-2016

Analyst – CMBS Analytics

Kroll Bond Rating Agency 01-28-2016

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

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TUESDAY, March 29, 2016
11:00 a.m. – 12:00 p.m. (ET)


TUESDAY, March 29, 2016
1:00 p.m. – 2:00 p.m. (ET)


WEDNESDAY, March 30, 2016
2:00 p.m. - 3:00 p.m. (ET)


THURSDAY, March 31, 2016
10:00 a.m. -11:00 a.m. (ET)

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THURSDAY, April 7, 2016 - SATURDAY, April 9, 2016
China National Convention Center
No. 7 Tianchen East Road, Chaoyang District
Beijing, China
Registration available here.

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THURSDAY, April 21, 2016
Marriott New York Downtown
New York, NY
Registration available here.

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MONDAY, May 16, 2016 – TUESDAY, May 17, 2016
Grand Hyatt New York
New York, NY
Registration available here.

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TUESDAY, May 31, 2016 – WEDNESDAY, June 1, 2016
Hyatt Regency Toronto
Toronto, Ontario
Registration is available here.

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

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

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

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 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 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

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

The Regulatory Capital and Liquidity Committee recently submitted a response to Basel’s Consultative Document regarding Capital Treatment for STC Securitisations. The committee is also 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”). 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

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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In the matter of Madden v. Midland, “the Supreme Court invited U.S. Solicitor General Donald Verrilli, the government’s lawyer at the high court, to file a brief expressing the administration’s views on whether the court should take up the case” on Monday, as reported by the Wall Street Journal

The case was brought to the Supreme Court by Midland Funding LLC, after a Second Circuit Court ruling in 2015 “that invalidated a debt buyer, Midland Funding LLC, from collecting on a $5,000 charged-off debt because the interest rate was higher than the state cap in New York, where the borrower lived.”

Midland Funding LLC asked the Supreme Court to review the case “arguing the Second Circuit ruling would have dire consequences for lenders and debt buyers because it undermines a common practice in their ability to sell and securitize debt.” SFIG filed an amicus brief in support of Madden’s petition for certiorari, as have other organizations and institutions. Although the Second Circuit decision is limited to the states of New York, Connecticut and Vermont, the “logic could be applied by other courts in the future if the banks lose their appeal.”

According to the article, expectations for timing on the administration’s views are that “it will likely take the general’s office several months to respond to that request.”

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Top House Republicans are preparing a legislative package aimed at removing regulatory constraints to financial-technology companies. Rep. Patrick McHenry (R-NC), a co-author of the "Innovation Initiative," said during his remarks at an event on Thursday, March 17th, "Here in Washington our regulators are more interested [in forcing] fintech companies into regulatory categories that are much more fitting with the 1930s, the 1940s and the 1950s. We have to update these systems here in Washington to meet these new categories."

The legislative package is expected to come out in mid-April. Despite his high hopes "that we can legislate in this key area this year," McHenry acknowledged it's an uphill battle in an election cycle. As noted by Isaac Boltansky, an analyst at Compass Point Research & Trading, the forthcoming "Innovation Initiative," which is also authored by Rep. Kevin McCarthy (R-CA), "will face a series of particular hurdles which make passage unlikely.”

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According to a recent Bloomberg article, the dollar amount of solar ABS deals sold so far this year—approximately $235 million—is more than the industry completed in all of 2015. Developers also stand to exceed the $239.5 million record set in 2014.

“It’s highly likely that issuances will grow this year,” stated Ted Brandt, Chief Executive Officer at Marathon Capital LLC. “There are a number of existing and new issuers that are very actively pursuing securitization strategies.” Brandt explained that recent numbers show growing interest from developers in tapping the ABS market and an increasing appetite from investors.

According to the article, several solar developers have demonstrated their ability to deploy over 35 megawatts—the approximate minimum securitization size—every quarter.  

If you are interested in joining SFIG’s Esoteric Committee, please contact

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According to a recent article in National Mortgage News, despite the emergence of a handful of new issuers in the PLS market and the implementation of key regulation paving the way for its comeback, the subprime securitization market remains stagnant due to supply issues. According to Grant Bailey, head of US RMBS at Fitch Ratings, “The seasoned nonprime market is very active… I think the constraint on the nonprime market hasn’t been investor interest as much as it’s been supply.” Bailey notes that investors seem less interested in nonprime than investors in some cases. As he tells National Mortgage News, "I think the banks aren't interested in making nonprime loans and the nonbanks are often dependent on selling the loans or securitizing them."

According to Equifax data, the year-to-date new nonprime loan count through October 2015 was up 28 percent, whereas the new loan count in the overall first-lien mortgage market was up 34.7 percent through October of last year. As National Mortgage News reports, “The subprime first-lien balance at origination in the first nine months of 2015 was up 6.29 percent at $154,835 on average, while overall first liens increased during the same period by just 2.21 percent, albeit with a higher average balance of $222,698. So by dollar volume, subprime share of the market is a little lower than by loan count and closer to 4 percent than 5 percent.”

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According to a recent Financial Times article by Alexander Batchvarov, Head of International Structured Finance at Bank of America Merrill Lynch Global Research, the EU securitization market has been labeled unjustifiably as toxic following the financial crisis. According to Batchvarov, it is often overlooked that securitization is simply a technique used to convert pools of illiquid loans into tradeable bonds and the “oversimplification and bias in public discourse” has resulted in a “guilty by association” verdict for securitization.

Batchvarov points out that securitized loans “were and still are originated mainly by EU regulated banks and in line with prudentially established underwriting standards..." and “the majority of EU securitization bonds publicly placed with institutional investors have [a] level of pool information disclosure exceeding that of any other secured or unsecured bond on EU markets.”

Data gathered years after the financial crisis also prove that the majority of European securitization bonds experienced very low defaults rates and European triple A-rated securitizations saw much lower downgrade ratings transition than triple-A rated European covered bonds, according to the article.

Batchvarov also called attention to the 2014 joint letter of the European Central Bank (“ECB”) and Bank of England (“BoE”), “the first official attempt that emphasized the proper use of the securitization for the benefit of the broader European economy.” This has led to an overdue revision of the EU securitization regulations which is now on the agenda of the European Parliament.

“It is for the benefit of the financing of [small and medium-sized enterprises] and the consumer — the core of the EU economy — that the securitization market must be revived. The sooner, the better.”

To read SFIG’s response to the 2014 ECB and BoE joint letter, please see here.

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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

Michael Flood Director, Advocacy

Dan Goodwin Director, Mortgage Policy

Jennifer Wolfe ABS Policy Manager

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

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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