The Securities and Exchange Commission (SEC) will consider changes to its regulations to ensure better disclosures and protections for investors in private-label MBS.
At an April 7 meeting, the commissioners are expected to discuss risk retention, which requires the MBS issuers to retain a portion of the credit risk.
The Obama administration supports the risk retention and Congress is working on legislation that would require securitizers to retain 5% of the credit risk.
Industry groups are very concerned that risk retention, combined with recent changes to accounting and capital rules, will make a revival of the private-label securities market very difficult.
In a letter to Senate Banking Committee leaders, 21 banking, housing and real estate groups urged the lawmakers to weigh the entirety of changes so legislative reforms "support, and not impede, a recovery in the securitized credit markets that fuel our overall economy."
