Asset-Backed Securities Regulation
In Title IX of his discussion draft, Senate Banking Committee Chairman Dodd (CT) takes a different approach to governing asset-backed securitization (ABS) than the Obama Administration1 or the House Financial Services bill, as reported.2 The Dodd bill includes a tough, ten-percent retention requirement for ABS, but applies this only to securitizers, not also to originators as in the other proposals. The legislation also provides a broader framework for potential exemptions from the risk-retention requirement, although it tracks the other legislation with additional tough disclosure and liability requirements for ABS issuers and originators. Mortgage-backed securities (MBS) originators would come under tough new securities-law exposure as ―underwriters.‖