ARTICLE
6 November 2015

US Federal Deposit Insurance Corporation Revises Provisions Of Its Securitization Safe Harbor Rule

SS
Shearman & Sterling LLP

Contributor

Our success is built on our clients’ success. We have a long and distinguished history of supporting our clients wherever they do business, from major financial centers to emerging and growth markets. We represent many of the world’s leading corporations and major financial institutions, as well as emerging growth companies, governments and state-owned enterprises, often working on ground-breaking, precedent-setting matters. With a deep understanding of our clients' businesses and the industries they operate in, our work is driven by their need for outstanding legal and commercial advice.
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.
United States Finance and Banking

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.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More