In the final version of “Volcker 2.0,” the FRB, FDIC, OCC, SEC, and CFTC finalized a massive, controversial rewrite of the rules governing the funds which U.S. banks and foreign banks doing business here may hold, own, sponsor, or otherwise serve and even market across an array of asset classes. These of course include housing finance, an arena of even more interest now in light of the FDIC’s recent safe-harbor liberalization and pending FHFA capital and conservatorship actions. The new construct gives large banks an arsenal of new “credit fund,” securitization, and other tools with which to redesign private loan securitization and even their own mortgage portfolios. Now, banks can organize funds that engage in mortgage securitization, credit-risk transfer or covered-bond issuance on their own, with other financial institutions, and in concert with the GSEs or Ginnie Mae.
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