Dodd-Frank: Securitization Group Speaks Up for "Esoteric" Assets

The ASF supports the idea of making changes in the securitization market and efforts to align the incentives of originators and securitizers with those of securitization investors, Deutsch writes in his comment letter.

“We believe that risk retention can aid in achieving this goal so long as the requirements are tailored to each asset class, taking into consideration that the forms of credit risk retention may differ by asset type,” Deutsch says.

But, in addition to the core group of assets frequently securitized, such as mortgages, other types of assets securitized have included intellectual property, church loans, equipment-related assets, mutual fund fees, timber, servicing advances, tax liens, transporation assets, and “insurance-related assets,” Deutsch says.

“All of these asset classes have their own securitization structures and practices that differ in important respects across each category based on a variety of factors, including the nature and characteristics of the assets, the historical development and credit performance of each asset class and the securitization structures themselves,” Deutsch says. “When crafting risk retention rules and providing appropriate exemptions, the joint regulators should consider the very large and growing universe of asset classes that exist beyond the core classes. Each of these esoteric asset classes provides necessary funding to various businesses and industries, and it is critical that the proposed regulations do not inhibit their growth.”

Other securitization coverage from National Underwriter Life & Health:

• Scottish Re Unwinds Securitization
• S&P: Mortgage Proposal Could Hurt Now, Help Later
• Life Settlement Securities Get Raters Attention
• Peachtree Closes Securitization Deal
• Swiss Re Securitizes Again