SIFMA today issued the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, on the final risk retention rule announced today by regulators:
"The finalization of the credit risk retention rules will help clarify the regulatory 'rules of the road' for securitization. This will bring some relief to the regulatory uncertainty that has been a negative factor in the recovery of non-government guaranteed mortgage securitization. We are pleased that the regulators finalized the adherence of the QRM definition to the CFPB's QM definition, which is a path SIFMA supported in its 2013 comments.
"On the other hand, we are disappointed that the regulators did not appear to respond to the numerous commenter requests to tailor the risk retention rules for CLOs, and are concerned that the rules may have a negative impact on the ability of CLOs to fund credit creation. This is important because CLOs are a key source of funding for Main Street businesses and other corporate borrowers, and this funding could become more expensive and less available.
"There are many other important aspects of the rule proposal that we will review with our members, given that those will apply to non-QRM loans and all other asset classes, such as credit cards, tender option bonds, and student loans."