Credit Risk Retention: Dodd-Frank Final Rule

PLI Webinar

02/26/2015 01:00 p.m. - 02:00 p.m. EST

Banking + Financial Services, Corporate Finance | Capital Markets, and Financial Institutions + Financial Services

Kenneth E. Kohler

Kenneth E. Kohler


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In late 2014, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Federal Reserve Board, the Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development (collectively, the “Joint Regulators”) each adopted a final rule (the “Final Rule”) implementing the credit risk retention requirements of section 941 of the Dodd-Frank Act for asset-backed securities (“ABS”).  The section 941 requirements were intended to ensure that securitizers have  “skin in the game” with respect to securitized loans and other assets.

As required by the Dodd-Frank Act, the Final Rule generally requires securitizers in both public and private securitization transactions to retain not less than 5% of the credit risk of the assets collateralizing any ABS issuance. Join Morrison & Foerster Senior of Counsels Kenneth E. Kohler and Jerry R. Marlatt as they address the key provisions of the Final Rule adopted by the Joint Regulators, including:  

  • Standard risk retention methods;
  • Transaction-specific risk retention options;
  • Types of securitizations exempt from the from the Final Rule;
  • Exemptions from risk retention for securitizers of residential mortgages; and
  • Transfer and hedging restrictions on securitizers.

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