On October 22, 2015, the Federal Deposit Insurance Corporation approved a final rule and a notice of proposed rulemaking that revise certain provisions of its Securitization Safe Harbor Rule. The final rule pertains to the treatment of financial assets transferred in connection with a securitization or participation. The rule clarifies the requirements of the securitization safe harbor as to the retention of an economic interest in the credit risk of securitized financial assets in connection with the effectiveness of the credit risk retention regulations adopted under Section 15G of the Securities Exchange Act. The final rule will be effective on the date that is the later of (i) 60 days after publication in the Federal Register and (ii) January 1, 2016.
The notice of proposed rulemaking intends to align the Securitization Safe Harbor Rule with US Consumer Financial Protection Bureau regulations dealing with the servicing of residential mortgages that became effective in January 2014. Specifically, the proposed rule would clarify that the requirement that a servicer take loss mitigation action within 90 days of delinquency does not necessitate that the securitization documents require a servicer to act contrary to the CFPB's mortgage loan servicing requirements as set forth in Regulation X. Comments on the proposed rule will be due 60 days after the rule is published in the Federal Register.
The FDIC's final rule relating to credit risk retention requirements and the notice of proposed rulemaking relating to residential mortgage loan servicing requirements are available at: https://www.fdic.gov/news/board/2015/2015-10-22_notice_sum_c_fr.pdf.
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