SIFMA Finds MBS Issuance Up, ABS Down

SIFMA issued a review of the U.S. securitization markets in 2015 that examined market trends, statistics and activity, and governmental and regulatory policy issues that impacted those markets.

The report, titled U.S. Securitization Year in Review 2015, found that new issuances of mortgage-backed securities ("MBS") increased by nearly 20% from the prior year. However, new issuances of other types of asset-backed securities ("ABS") decreased substantially, particularly in the credit card market. SIFMA described the only category of non-mortgage ABS that did better in 2015 as "esoterics." That category included ABS in consumer loans and green finance.

SIFMA also emphasized significant participation in the markets by new types of non-bank lenders, and named several untraditional financial firms that increased their business over the past year.

Additionally, SIFMA underscored the following recommendations and legal and policy developments:

• the adoption by Fannie Mae and Freddie Mac of credit risk transfer programs;

• the need to determine whether particular securitization vehicles constitute "covered funds" under the Volcker Rule;

• the application of margin requirements to securitization vehicles;

• the imposition of risk retention requirements on securitization transactions;

• the imposition of margin requirements on to-be-announced transactions;

• global capital requirements that are imposed on securitizations;

• the application of state usury laws to loans that are made by national banks and then sold to non-banks; and

• the request by U.S. Treasury for more information regarding online lenders, particularly those that lend to small businesses and consumers.