Asset-Backed Securities

Two years ago, on July 21, 2010, President Obama signed into law a package of financial regulatory reforms unparalleled in scope and depth since the New Deal. The Dodd-Frank Act was intended to restructure the regulatory framework for the US financial system, with broad and deep implications for the financial services industry where the crisis started. But its impact also was intended to be felt well beyond the financial sector, extending federal regulation into areas of corporate governance applicable to all US public companies.

Few provisions of the Dodd-Frank Act took effect in the summer of 2010. Instead, the specifics of the Act were intended to be developed through the federal rulemaking process, as the Act mandated the development and implementation of nearly 400 separate regulations to be enacted by, or coordinated among, nearly a dozen federal departments or agencies. To date, the deadlines for more than half of the required rulemakings have expired. But even with these delays, the last two years have witnessed the promulgation of more than 100 rules and the issuance of many additional proposed regulations for public comment. This Report discusses the many strides that have been made pursuant to the Act to date and forecasts what is yet to come.

Click here for a PDF of the full report.

On June 7, 2012 the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Fed), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the Agencies) released revisions to their market risk capital rules in a final rule titled Risk-Based Capital Guidelines: Market Risk.  The rule, which implements certain revisions made by the Basel Committee on Banking Supervision (BCBS) to its market risk framework between 2005 and 2010, requires large banking organizations to adjust their capital requirements to better capture the market risk in their trading activities.  Consistent with certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the final rule does not include aspects of the BCBS’s market risk framework that rely on credit ratings and instead includes alternative standards for calculating standardized specific capital requirements for debt and securitization positions.  The rule applies to banks with aggregate trading assets and trading liabilities equal to at least 10 percent of total assets or at least $1 billion dollars. [click to continue…]

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or the Act) was enacted one year ago. At that time, it was heralded as perhaps the most dramatic set of regulatory reforms since the 1930s. The Act was expected to have significant effects in both the short and long term. Dodd-Frank’s provisions, however, are not confined to the US market. The Act is intended to have significant implications for non-US companies doing business in the United States or whose securities are listed on a US stock exchange. What is more, the Act purports to regulate certain transactions and entities with little direct connection to the United States.

The Dodd-Frank Wall Street Reform and Consumer Protection Act provides that a swap or security-based swap (collectively, “Swaps”) otherwise subject to mandatory clearing is not required to be cleared if one party to such Swap (1) is not a financial entity, (2) is using such Swap to hedge and or mitigate commercial risks, and (3) notifies the Commodity Futures Trading Commission (the “CFTC”) or Securities and Exchange Commission (the “SEC” and, together with the CFTC, the “Commissions”), as applicable, how it generally meets its financial obligations associated with entering into non-cleared Swaps (such exception, the “End-User Clearing Exception”). 

The Commissions have each proposed new rules to specify requirements [click to continue…]

by: Alex RadetskyCarlos Larkin

On March 29, 2011, the Office of the Comptroller of the Currency (“OCC’), the Board of Governors of the Federal Reserve System (“FRB”), the Federal Deposit Insurance Corporation (“FDIC”), the U.S. Securities and Exchange Commission (“SEC”), the Federal Housing Finance Agency (“FHFA”), and the Department of Housing and Urban Development (“HUD”) jointly issued a proposed rule to implement Section 941(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Proposed Rule”).  Althought this rule is extenstive, this post will be limited to a discussion of Qualified Residential Mortgages (“QRMs”), their exempt status and the underwriting standards that create this exemption.

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