Legal win for CLO funds may aid Trump’s efforts to dismantle Dodd-Frank Act
By Kristen Haunss
A legal victory for Collateralized Loan Obligation (CLO) funds may help President Donald Trump’s efforts to dismantle the Dodd-Frank Act, a massive regulatory package that was signed into law by his predecessor, President Barack Obama. CLO funds, one of the largest lenders to U.S. companies including retailers Toys “R” Us and J. Crew Group, are celebrating the win, which exempts the $501 billion asset class from the Dodd-Frank risk-retention rules that require managers to hold some of their funds’ risk. …“Could you now seek to design a [Collateralized Mortgage Obligation] CMO with a manager structure akin to the CLO one that was exempted? Absolutely,” said Karen Petrou, a co-founder of consulting firm Federal Financial Analytics. “I’m sure hard thinking is already at work on that score.”