FDIC and OCC Approve Final Credit Risk Retention Rule

The Federal Deposit Insurance Corporation ("FDIC") and Office of the Comptroller of the Currency ("OCC") voted to adopt the final Credit Risk Retention Rule.

The Credit Risk Retention Rule implements Section 941 of the Dodd-Frank Act, which requires the securitizers of asset-backed securities to retain "not less than five percent" of the credit risk of assets collateralizing the securitization. Additionally, Section 941 exempts qualified residential mortgages ("QRMs") from risk retention and aligns that definition of "QRM" with the Consumer Financial Protection Bureau's definition of "qualified mortgage."

The Board of Governors of the Federal Reserve System is expected to vote on the final Credit Risk Retention Rule on October 22, 2014.

See: Final Rule Text.See also: Chair Gruenberg Statement; Statement of Vice Chair Hoenig; Statement of Director Jeremiah O. Norton; Comptroller Curry Statement; SIFMA Statement on Final Risk Retention Rule.