Yesterday House Representatives John Adler (D-NJ), John Campbell (R-CA), Dennis Moore (D-KS) and Gary Miller (R-CA) worked on an amendment offered by Representatives Walt Minnick (D-ID) and Melissa Bean (D-IL) to the House Financial Services Committee financial regulatory reform bill that passed the Committee unanimously.

The amendment reduces the maximum 'retention' or 'skin-in-the-game' requirement from 10% to 5%.
In a press release this morning, the Commercial Mortgage Securities Association said that the new language of the bill customizes retention provisions to reflect the unique nature of the CMBS sector, which uses a third-party investor who buys the first-loss position and re-underwrites all loans in the pre-issuance period.

The association had previously called on policymakers to structure retention provisions carefully to maintain and strengthen the safeguards that exist in the CMBS market through explicitly recognizing the important role of third-party investors who buy the first-loss position and perform due diligence.

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