George Miller, executive director of the American Securitization Forum, today made the following statement responding to the proposed amendments from the Financial Accounting Standards Board:
We are reviewing proposed revisions to FAS 140 and FIN 46(R) released yesterday
by the Financial Accounting Standards Board (FASB). Transparent, relevant
and operational accounting standards governing transfers of financial assets and consolidation
of special purpose entities are critically important to the quality, accuracy
and utility of financial reporting for securitization transactions. In turn, securitization
is a widely-used financing technique that has historically provided funding for a wide
range of consumer and business credit needs. Especially in today's severely constrained
credit and liquidity environment, it is essential to restore the function and efficiency
of the securitization markets.
ASF agrees that a comprehensive review of accounting standards in this area
is appropriate. However, we are concerned that the proposed changes may impair securitization
market activity, by making it more difficult and expensive to finance mortgage,
automobile, credit card, student loan and other forms of consumer and business
debt. This could materially reduce the availability and increase the cost of credit in the
United States. Although FASB has delayed implementation of these proposals by one
year, we are concerned that a 45-day public comment period (for organizations like
ours, who intend to participate in FASB's Public Roundtable Meeting on November
6th), does not provide adequate time to consider the proposed revisions and other possible
alternatives, before final decisions are made on how current accounting standards
will change. Although we believe the proposed implementation target for the changes
may be reasonable, we believe that FASB should take the time necessary to consider
alternative approaches to those that have been proposed, in order to achieve highquality
standards that will produce better outcomes for accounting policy, the financial
markets and economy in both the short and long-term. We look forward to working
with our members, FASB, regulators and other policymakers to achieve this goal.
