February 1, 2019 | Issue 269
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Legislative Fix Being Considered for Legacy LIBOR Contracts
Replacing LIBOR as the benchmark for $1.8 trillion in US floating rate notes (FRNs) may be an impossible task for the market, and the New York State legislature could be asked to step in, according to
Risk.net
.
Many existing FRNs will convert to fixed rate instruments if LIBOR is no longer published after the end of 2021. Other notes have no contractual back-up provisions at all. According to the article, around half of the outstanding $1.8 trillion in FRNs are in one of these two buckets, potentially leading to future legal disputes. Attempts to amend existing fallbacks so that FRNs can switch to a different rate have run up against the U.S. Trust Indenture Act. This act requires all noteholders, possibly hundreds of entities, to agree to any change to the benchmark rate. The article quotes a spokesperson for the Alternative Reference Rates Committee as stating, “[We’re] discussing the idea of targeted legislative relief where this is the case [to] achieve a best interest outcome that will work for everyone.”
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Cooling Housing Market Prompts Closer Scrutiny of Some Lenders
The
Wall Street Journal
reports that as housing markets are cooling, Ginnie Mae is increasing oversight of nonbank lenders, asking some to improve certain financial metrics before granting them the ability to continue to issue Ginnie-backed mortgage bonds. Additionally,
Ginnie
has been granting approvals with shorter time frames to lenders. These actions, affecting a small number of both large and small lenders, come after a report from the Federal Reserve last year on the unique funding challenges that nonbank servicers face, especially those managing payments on Ginnie bonds.
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Chairman Crapo Outlines Senate Banking Committee Agenda
Chairman Mike Crapo
(R-ID)
released the Senate Banking Committee’s agenda for the 116
th
Congress on Tuesday, January 29, according to a Committee press release. The Chairman’s top priorities include housing finance reform, implementing S.2155, the regulatory relief bill, identifying bipartisan bills to support the capital markets, FinTech, Credit Bureau reform, data privacy, access to credit, and a number of other topics. SFIG’s Government Relations Committee remains deeply involved with legislators on many of these issues, and if you are interested in joining our Committee or attending our meetings, please contact
[email protected]
.
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White House Takes Deliberative Steps Toward GSE Reform
According to
Bloomberg
, in the coming weeks the White House will start soliciting legislative and regulatory GSE reform proposals from various Federal agencies. While Acting FHFA Director Otting recently commented on the potential for a recapitalization and release of the GSEs in the coming months, the deliberative approach taken by the White House suggests a more conservative timetable and action plan. If you are interested in joining our GSE Reform Task Force, please contact
[email protected]
.
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Otting Comments on GSE Reform Raise Questions
The
American Banker
writes that during recent comments from Acting FHFA Director Joseph Otting to staff, he stated that the White House and Treasury Department would, within the next month, set a direction for the future of housing finance. He also stated that Mark Calabria, the Administration’s nominee to head the FHFA, had signed off on that plan.
American Banker
writes that these actions and statements raise questions, such as why the Administration would not wait for Calabria to be confirmed before moving forward with the plan, why would Treasury Secretary Mnuchin support administrative reform when he had previously stated his preference for legislative action to reform the GSEs, whether the statements will complicate Calabria’s nomination, if these moves will spur Congressional action, and what exactly the plan from Treasury and the White House will look like.
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House Chair, Senate Ranking Member Dems Request Otting Plans at FHFA
On Friday, January 25, House Financial Services Committee Chair Maxine Waters (D-CA) and Senate Banking, Housing and Urban Affairs Ranking Member Sherrod Brown (D-OH) sent a letter to Acting FHFA Director Joseph Otting, asking for information on his plans to “move Fannie Mae and Freddie Mac out of Conservatorship” and requesting a detailed description of the mission of the Treasury Department and the White House, in respect to the GESs and any policy changes flowing from that mission. Additionally, the letter raises concerns about the process by which Mr. Otting assumed leadership at the FHFA and calls into question his independence as Acting Director.
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Trustee Committee Meeting
Tuesday, February 5
11:00 a.m. – 12:00 p.m. EDT
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Monthly Auto Issuer Committee Call
Wednesday, February 6
2:00 p.m. – 3:00 p.m. EDT
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LIBOR Task Force Call
Wednesday, February 6
4:00 p.m. – 5:00 p.m. EDT
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Agenda Details Announced
Click here
to view who is speaking on the panels, fireside chats, and plenaries during SFIG Vegas 2019.
Tune-In for Tech Wednesday
Be sure to attend the cybersecurity plenary, blockchain content sponsored by the Chamber of Digital Commerce, and the 19 different tech demos on
Wednesday, February 27
. These live demonstrations will help attendees identify opportunities for adding value at their companies while also providing exposure for the presenting vendors.
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Free Bootcamp 5K Run and Yoga Classes Available
These events are brought to you by our Fitness Sponsor, Fifth Third Bank.
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FICO Networking Reception
Featuring Basketball Star Julius "Dr. J" Erving
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Don't miss the FICO Networking Reception on Tuesday, February 26, from 5:00 - 6:30 p.m. PDT in the SFIG Vegas Exhibit Hall. The first 50 attendees will receive a basketball with
Julius "Dr. J" Erving's
signature! Get ready for a fun, interactive networking session!
You do not need to RSVP in advance; however, you will need your SFIG Vegas 2019 badge to attend.
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Download the SFIG Vegas 2019 Mobile App
The
SFIG Vegas 2019 App
is now available to download! Simply search for "
SFIG Vegas
" in the
Apple App Store
or
Google Play
, and download it to your iPhone, iPad, or Android device.
Make the most of your SFIG Vegas 2019 experience and download the app now.
Join the online
#SFIGVegas
conversation and expand your professional network!
We would like to extend a special thanks to our app sponsor, AST.
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Speaker Nominations are Open for SFIG Canada 2019
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Speaker nominations are now open for SFIG Canada 2019. The event will take place May 22-23 at the Fairmont Royal York Hotel in Toronto, Canada.
Click here
to view panel topics and to nominate.
Nominations close on March 8 at 5:00 p.m. EDT.
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