On May 20, 2010, the United States Senate passed a financial reform bill entitled The Restoring American Financial Stability Act of 2010 (the “Senate Bill”), which includes provisions designed to improve the offering process for asset-backed securities (“ABS”).1 The Senate Bill was passed in response to a bill passed by the United States House of Representatives on December 11, 2009, entitled The Wall Street Reform and Consumer Protection Act of 2009 (the “House Bill”).2 A portion of the House Bill contains similar securitization reforms.3 The United States Senate and the United States House of Representatives will now hold a conference to reconcile the provisions of the House Bill and the Senate Bill.4
Separately, the Federal Deposit Insurance Corporation (the “FDIC”) released an Advanced Notice of Proposed Rulemaking (the “FDIC ANPR”)5 on December 15, 2009, which contains proposed amendments to the FDIC’s securitization “safe harbor” rule that would regulate the issuance of ABS.6 The FDIC ANPR would require banking institutions that issue ABS to satisfy various conditions to obtain “safe harbor” from the FDIC’s ability to repudiate contracts of insolvent banks and recover securitized assets.7 On May 17, 2010, the FDIC released a Notice of Proposed Rulemaking8 revising the proposed regulations in the FDIC ANPR, and extending the comment period until July 1, 2010.
Finally, on April 7, 2010, the Securities and Exchange Commission announced proposed regulations that would significantly revise Regulation AB and other laws governing offerings, sales and reporting for ABS.9
These legislative and regulatory initiatives address many of the same issues, such as (i) risk retention, (ii) continued periodic reporting and (iii) increased disclosure to investors. We thought it would be helpful to provide a chart that compares and contrasts some of the key overlapping points in these initiatives.
Click here to view CERTAIN PROPOSED LEGISLATIVE AND REGULATORY SECURITIZATION PROVISIONS