Final Rule: Credit Risk Retention
Agency/Agencies: SEC, OCC, Fed, FDIC, FHFA, HUD
Federal Register Publication Date: 12/24/2014
Summary: The SEC, OCC, Fed (Board of Governors of the Federal Reserve System), FDIC, FHFA, and HUD (“the agencies”) adopted a joint final rule (the rule, or the final rule) to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 (15. U.S.C. 78o-11), as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 15G generally requires the securitizer of asset-backed securities to retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages,” as such term is defined by the agencies by rule.