October 21, 2015 Newsletter
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October 21, 2015
 
SFIG News

Industry Jobs

SFIG Calendar

Meetings

Events

Advocacy Outlook

Industry News Highlights

Upcoming Events in Washington

 
SFIG NEWS
FDIC EXPECTED TO VOTE ON MARGIN RULES FOR COVERED SWAP ENTITIES TOMORROW

Tomorrow, Thursday, October 22nd, the Federal Deposit Insurance Corporation (“FDIC”) will hold a Board of Directors meeting in open session at 10:00 a.m. (ET). As part of their Discussion Agenda, the FDIC plans to address the Notice of Final Rulemaking to Establish Margin and Capital Requirements for Covered Swap Entities and the Interim Final Rule to Exempt Commercial End Users and Small Banks. This discussion item is expected to be voted on during the meeting, in addition to other items such as the FDIC’s proposal to conform safe harbor requirements to the final rule on Credit Risk Retention.

SFIG will update its membership after the meeting to report on results and takeaways.

To read SFIG's comment letter on the re-proposed margin and capital requirements for covered swap entities for uncleared swaps, click here. To view SFIG’s response on the Securitization Safe Harbor Rule, please click here. If you are interested in learning more about SFIG’s advocacy or joining SFIG’s Derivatives in Securitization Task Force or Risk Retention Task Force, please contact Alyssa Acevedo

 
 
SFIG CONTINUES TO ADVOCATE FOR MORTGAGE REIT INVESTMENT IN GSE CREDIT RISK SHARING TRANSACTIONS

This week, SFIG staff continued to meet with members of the House Committee on Financial Services, including the staff for Representatives John Delaney (D-MD), John Carney (D-DE), and Ed Perlmutter (D-CO) to discuss mortgage Real-Estate Investment Trust (“mREIT”) participation in government-sponsored enterprise (“GSE”) credit risk sharing transactions (“CRTs”). In 2013, the Federal Housing Finance Agency directed the GSEs to issue mortgage credit securities in order to shift credit risk to the private sector and further protect the taxpayer. However, there are regulatory obstacles that prevent mREITs from fully participating in CRTs. SFIG is advocating for clarification of mREIT rules to allow more private capital to be included in the housing sector.

Contact Michael.Flood@sfindustry.org to learn more about SFIG’s Congressional outreach efforts.

 
 
REMINDER TO REGISTER FOR IMN'S INVESTORS' CONFERENCE ON MARKETPLACE LENDING

Next Thursday, October 29th, join SFIG, as a lead association supporter, and over 360 registered investors and issuers at IMN’s Investors’ Conference on Marketplace Lending at the Marriott Downtown in New York City. This event will bring together many of the leading platforms and service providers in this growing sector to provide insight on:

  • The outlook and potential impact of new regulations on the sector
  • The importance of securitization as a funding tool
  • Risk management/investor reporting developments
  • Investment strategies for debt and equity buyers
  • The European market, and cross border opportunities for U.S. platforms and investors

The following SFIG staff will participate in the event: Jennifer Wolfe, ABS Policy Manager, will be speaking on the “Thought Leadership & the Future of Regulation in US Marketplace Lending” panel; Richard Johns, Executive Director, will be speaking on the “Development of Securitization in Marketplace Lending” panel; and Kristi Leo, Senior Advisor, will moderate the “Marketplace Lending & the Lenders' Perspective” panel.

 
 
AGENDA AVAILABLE FOR SFIG & IMN'S PRIVATE LABEL RMBS REFORM SYMPOSIUM

The agenda is now available for SFIG & IMN's Private Label RMBS Reform Symposium, taking place November 12th at the New York Marriott Downtown. The program will feature a keynote address from Scott Garrett (R-NJ), U.S. Congressman, United States House of Representatives, along with timely panel topics including:

  • State of the Non-Agency Market
  • What’s New in PLS RMBS Reform?
  • Overview of the New, Comprehensive Reps & Warranties Provisions
  • Servicer Oversight & Enforcement
  • Impact of Regulations on the RMBS Market
  • Proposed Deal Manager/Agent Frameworks
  • The Credit Risk Transfer Program: Impact on PLS RMBS
  • Paving the Way for Expanded Credit/Non-QM Products
  • The RMBS Investor Perspective
  • Strategies for Encouraging Issuer Adoption

View the full agenda here.

To register, please click here. For more information on sponsorship, please contact Christopher Keeping at ckeeping@imn.org or at 212-901-0533.

 
 
INDUSTRY JOBS

SFIG currently has a position open for:

  • Communications and Media Manager: will be an integral member of SFIG staff, providing support across the whole organization and serving as a vital link between SFIG, its membership and other external audiences. Additional information on the position, as well as a link to the application, is available here.

Some of the latest industry positions available include:

JOB TITLE   COMPANY POSTING DATE
Finance Associate   Hogan Lovells US LLP 10-09-15
Attorney - Securitization   Ford Motor Credit Company 9-29-15
Consumer ABS Analysts   Kroll Bond Rating Agency, Inc. 8-19-15
Senior Vice President, RMBS Monitoring   Moody’s Corporation 8-18-15
Associate Analyst 1   Moody’s Corporation 7-29-15
Vice President, Senior Credit Officer (ABS Surveillance)   Moody’s Corporation 7-31-15
Associate Analyst 3   Moody’s Corporation 7-29-15
Capital Markets Associate   Cadwalader, Wickersham & Taft LLP 7-21-15
Director - Credit Process Management   Fitch Ratings 7-09-15
Associate Director / Director, Asset Backed Securities   Fitch Ratings 7-08-15

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.

 
 
SFIG CALENDAR
MEETINGS
STUDENT LOAN COMMITTEE CALL

THURSDAY, October 22, 2015
1:00 p.m. – 2:00 p.m. (ET)

 
 
INVESTOR COMMITTEE CALL REGARDING RMBS 3.0

THURSDAY, October 22, 2015
4:00 p.m. – 6:00 p.m. (ET)

 
 
BIWEEKLY RISK RETENTION INDUSTRY GUIDE WORKING GROUP CALL

TUESDAY, October 27, 2015
2:00 p.m. – 3:00 p.m. (ET)

 
 
BIWEEKLY AUTO ISSUER COMMITTEE CALL

WEDNESDAY, October 28, 2015
2:00 p.m. – 3:00 p.m. (ET)

 
 
CREDIT CARD ISSUERS - INVESTORS CONFERENCE CALL

WEDNESDAY, October 28, 2015
4:00 p.m. – 5:00 p.m. (ET)

 
 
EVENTS
IMN’s INVESTORS’ CONFERENCE ON MARKETPLACE LENDING

THURSDAY, October 29, 2015
Marriott New York Downtown
New York, NY

  • Jennifer Wolfe will be speaking on the “Thought Leadership & the Future of Regulation in US Marketplace Lending” panel
  • Richard Johns will be speaking on the “Development of Securitization in Marketplace Lending” panel
  • Kristi Leo will be moderating the “Marketplace Lending & the Lenders’ Perspective” panel

Registration is available here. The agenda can be found here.

 
 
SFIG & IMN’s PRIVATE LABEL RMBS REFORM SYMPOSIUM

THURSDAY, November 12, 2015
Marriott New York Downtown
New York, NY

  • Richard Johns will be delivering the opening remarks and speaking on the “RMBS Instant Replay” panel
  • Dan Goodwin will be moderating the “State of the Non-Agency Market” panel
  • Mary Robinson will be moderating the “Proposed Deal Manager/Agent Frameworks” panel
  • Michael Flood will be moderating the “Credit Risk Transfer Program: Impact on PLS RMBS” panel

Registration is available here. The agenda can be found here.

 
 
SFIG BOARD OF DIRECTORS MEETING

WEDNESDAY, December 9, 2015
12:00 p.m. – 5:00 p.m. (ET)
Deloitte & Touche
30 Rockefeller Plaza
New York, NY 10112
Note: Closed Meeting

 
 
SFIG & IMN's ABS VEGAS 2016 CONFERENCE

SUNDAY, February 28, 2016 – WEDNESDAY, March 2, 2016
The Aria Resort & Casino
Las Vegas, NV
Registration is available here.

 
 
ADVOCACY OUTLOOK

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. For its first initiative, the committee commented on the Treasury Department's Request for Input on Online Marketplace Lending. The comments were submitted on September 30th and drafted by counsel at Chapman and Cutler LLP.

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

SFIG’s Student Loan Committee is focusing on and responding to the Proposed Changes to Moody’s Approach to Rating Securities Backed by FFELP Student Loans. SFIG submitted an extension request on August 14th and Moody’s announced the deadline for comments has been extended to October 30th.  

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

The RMBS 3.0 Task Force released its Second Edition RMBS 3.0 Green Paper in November of 2014. The task force’s most recent work product will be presented at the November 12th SFIG/IMN Private Label RMBS Symposium. 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; 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 fall 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 submitted its comments on FHFA’s update to the single security initiative on October 7, 2015. The task force also recently received an update from the SFIG participants on the Industry Advisory Group for the Common Securitization Platform and Single-Security. 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. Additionally, the task force will continue to engage the Federal Housing Finance Agency 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 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 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 Working Group 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

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 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.

 
 
INDUSTRY NEWS HIGHLIGHTS
YTD 2015 JUMBO PRIME RMBS ISSUANCE OVERTAKES 2014 TOTAL

A Fitch Ratings press release published last week highlights that jumbo prime RMBS issuance for the first three quarters of 2015 has already surpassed total year issuance for 2014.  The release cites Fitch Ratings’ third quarter "US Prime Jumbo RMBS Trends" report in noting that, despite a decline in the number and of size of RMBS transactions from the first two quarters of the year, the $10.1 billion of RMBS issued thus far in 2015 comes in well above 2014’s $8.3 billion total.

 
 
WATT SAYS TIMELINE FOR CSP TO BE ANNOUNCED IN 2016

Speaking at an industry conference on Monday, October 19th, Federal Housing Finance Agency (“FHFA”) Director Mel Watt told audiences that the timeline for the Common Securitization Platform (“CSP”) will be announced next year. According to an article in Reuters, Watt said in a speech “I can confirm that we plan to announce the Release 1 timeline in 2016. We also hope to be able to announce the Release 2 timeline next year.” Release 1 refers to the first stage of the joint venture between Fannie Mae and Freddie Mac (“GSEs”), during which the CSP will begin issuing and administering Freddie Mac securities. Both GSEs would issue a Single Security via the CSP during the second stage.

Director Watt’s statement may provide some relief to industry participants who have requested additional clarity on the timing of the implementation of both the Single Security and the CSP.

As reported on October 7th, SFIG made such a request of the FHFA in its comment letter on the Single Security and during discussions as a participant on Common Securitization Solutions' Industry Advisory Group. To join SFIG’s GSE Reform Task Force and learn more, please contact Amanda.Bateman@sfindustry.org

 
 
FHLB-GINNIE MAE SECURITIZATION PROGRAM GAINING MOMENTUM

According to a recent article in National Mortgage News, a new program that allows the Federal Home Loan Banks (“FHLBs”) to securitize government backed loans through Ginnie Mae is gaining momentum. Since the program was piloted in 2013, six Ginnie Mae pools have been issued through the Government Direct program, an initiative spearheaded by the Chicago FHLB. While the only other banks to receive regulatory approval to participate are the Atlanta and Boston FHLBs, others are expected to apply.  Several state housing finance agencies have also expressed interest in the program. Additionally, the Des Moines and San Francisco FHLBs currently have applications pending at the Federal Housing Finance Agency. As stated by Ginnie Mae President Ted Tozer, “It is picking up steam… If everything goes right, hopefully by spring, maybe nine or 10 of the FHLBs will be feeding product into the program.

 
 
CALLS FOR REVIVAL OF NPL SECURITIZATION IN CHINA

According to a recent Bloomberg article, there has been recent pressure in China to bring back nonperforming loan (“NPL”) securitization in order to help banks reduce the size of their NPLs amid diminishing profits, rising defaults and worsening credit strains. China Construction Bank Corporation said last month that it is studying NPL securitization and a central bank official said in May that these products are under review. However, regulators this month declined to comment on the plans.

There are varying opinions within the industry regarding NPLs. Jian Hi at Moody’s explained, “NPL securitization would help banks to manage their existing balance sheet better and extend more loans to support economic growth.”

However, Ann Rutledge, Founding Principal at R&R Consulting, warned “[s]tructures that allow lenders to move troubled credit off their books won’t encourage prudence among banks...” and rating agencies may not be well equipped to rate NPL securitizations. 

 
 
UPCOMING EVENTS IN WASHINGTON
FEDERAL DEPOSIT INSURANCE CORPORATION BOARD OF DIRECTORS MEETING

THURSDAY, October 22, 2015
10:00 a.m.  (ET)
Please click here for the meeting agenda.

 
 
SFIG COMMITTEES AND TASK FORCES

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

Mary Robinson Policy Manager

Alyssa Acevedo Senior Analyst, ABS Policy

Amanda Bateman Policy Analyst

Daniel Tees Policy Analyst

Jennifer Serpas Office Manager

Allison Creswell Events Coordinator

Sarah Clarke Executive Administration

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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