Featured Product

    FED Proposes to Extend Information Collection on Credit Risk Retention

    October 02, 2019

    FED is proposing to extend for three years, without revision, the recordkeeping and disclosure requirements associated with Regulation RR on credit risk retention. FED also published the draft supporting statement for the recordkeeping and disclosure requirements associated with Regulation RR. Comments on the proposal must be submitted by November 29, 2019. The estimated number of respondents for this information collection, which is titled FR RR, is 10.

    The credit risk retention rule of FED applies to any securitizer of asset-backed securities that is a state member bank or a subsidiary of a state member bank and is codified in the Regulation RR of FED (12 CFR part 244). The SEC rules regarding credit risk retention (17 CFR part 246) apply to any securitizer that is not an insured depository institution or a subsidiary of an insured depository institution. Regulation RR of FED and the credit risk retention rule of SEC include a number of mandatory recordkeeping and disclosure requirements. FR RR information collection (OMB No. 7100-0372) accounts for the reporting associated with the Regulation RR as well as the burden associated with the SEC credit risk retention rule for securitizers that are, or are a subsidiary of, a bank holding company, savings and loan holding company, intermediate holding company, Edge or agreement corporation, foreign banking organization, or non-bank financial company supervised by FED. 

    The credit risk retention rule generally requires a securitizer to retain not less than 5% of the credit risk of any asset that the securitizer, through the issuance of an asset-backed security (ABS), transfers, sells, or conveys to a third party. The rule also prohibits a securitizer from directly or indirectly hedging or otherwise transferring the credit risk that the securitizer is required to retain under section 15G and the agencies’ implementing rules. The credit risk retention rule exempts certain types of securitization transactions from these risk retention requirements and authorizes the agencies to exempt or establish a lower risk retention requirement for other types of securitization transactions.

    In addition, the rule provides that a securitizer may retain less than 5% of the credit risk of commercial mortgages, commercial loans, and automobile loans that are transferred, sold, or conveyed through the issuance of asset-backed security interests by the securitizer if the loans meet underwriting standards established by the Federal banking agencies. The credit risk retention rule sets forth permissible forms of risk retention for securitizations that involve issuance of an asset-backed security as well as exemptions from the risk retention requirements. The agencies believe that the recordkeeping and disclosure requirements associated with the various forms of risk retention enhance market discipline, help ensure the quality of the assets underlying a securitization transaction, and assist investors in evaluating transactions.

     

    Related Links

    Comment Due Date: November 29, 2019

    Keywords: Americas, US, Banking, Securities, Regulation RR, FR RR, Information Collection, Asset Backed Securities, Disclosures, ABCP, Securitization, Credit Risk Retention, Credit Risk, SEC, FED

    Related Articles
    News

    US Agencies Requests Comments on Use and Impact of CAMELS Ratings

    US Agencies (FDIC and FED) are seeking information and comments from interested parties regarding the consistency of ratings assigned by the agencies under the Uniform Financial Institutions Rating System (UFIRS).

    October 18, 2019 WebPage Regulatory News
    News

    BoE Announces Date for Publication of Stress Test Results for Banks

    BoE announced its plans to publish results of the full UK annual stress tests on December 10, 2019.

    October 18, 2019 WebPage Regulatory News
    News

    PRA Consults on Approach to Supervising Liquidity and Funding Risks

    In consultation paper (CP27/19), PRA published a proposal (CP27/19) to update the supervisory statement SS24/15 on the PRA approach to supervising liquidity and funding risk.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Consult on Policy Statement on Allowance for Credit Losses

    US Agencies (FDIC, FED, NCUA, and OCC) are consulting on the policy statement on allowances for credit losses and on the guidance on credit risk review systems.

    October 17, 2019 WebPage Regulatory News
    News

    FSI Paper Examines Use of Suptech Initiatives by Financial Authorities

    The Financial Stability Institute (FSI) of BIS published a paper that examines the suptech developments by analyzing suptech initiatives of 39 financial authorities globally.

    October 17, 2019 WebPage Regulatory News
    News

    ECB Publishes Recommendations on Euro Risk-Free Rates Transition

    ECB published a report, by private sector working group on euro risk-free rates, which contains recommendations, from a risk management perspective, on the transition to new risk-free rates.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Publish Notice to Extend Form FFIEC 102 for Three Years

    US Agencies (FDIC, FED, and OCC) published a joint notice regarding extension of the market risk regulatory report for institutions subject to the market risk capital rule (FFIEC 102).

    October 17, 2019 WebPage Regulatory News
    News

    FSB Report Examines Implementation and Impact of G20 Financial Reforms

    FSB published fifth annual report on the implementation and effects of the G20 financial regulatory reforms.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Launches Consultation on Comprehensive Pillar 3 Disclosures

    EBA proposed the new comprehensive implementing technical standard (ITS) for public disclosures by financial institutions.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Consults on Revised Technical Standards on Supervisory Reporting

    EBA launched a consultation on the revised implementing technical standards, or ITS, on supervisory reporting.

    October 16, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3997