SIFMA and TOB Programs Submit Comments to Federal Agencies on Credit Risk Retention

SIFMA and the sponsors of tender option bond ("TOB") programs provided comments to the Office of the Comptroller of the Currency ("OCC"), the SEC, the Board of Governors of the the Federal Reserve System ("FRB"), the Federal Deposit Insurance Corporation ("FDIC"), the Federal Housing Finance Agency ("FHFA"), and the U.S. Department of Housing and Urban Development ("HUD") on the Agencies' proposed rule for credit risk retention.Together, SIFMA and the TOB entities represent participants in the municipal securities industry and the interests of many of the TOB Program sponsors currently in the market. The groups communicated their concern that, in their belief, the credit risk retention proposals do not:

• adequately address the full breadth of the TOB market;
• specifically reflect the risk reduction and retention mechanisms inherent in the tender option bond structure; or
• fully accommodate existing market practices or structural requirements or limitations.

The groups also stated that they believe the TOB programs should be exempted from the risk retention requirements that will be imposed on asset-backed securities transactions generally under the proposals.

See: SIFMA and TOB Programs Comment Letter. Related news: SIFMA Submits Comments on Credit Risk Retention Proposed Rule (October 30, 2013); Agencies Propose Rule Change Regarding Credit Risk Retention of Securitized Assets (Fed. Reg.) (October 18, 2013).