February 8, 2019 | Issue 270
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SFIG Hosts Roundtable with Rep. Bill Huizenga (R, MI-2)
On Monday, February 4, SFIG hosted a Roundtable lunch in New York City with Congressman Bill Huizenga (R, MI-2), his Chief of Staff, SFIG members, and SFIG staff. Rep. Huizenga serves on the Financial Services Committee and is Ranking Member on the Investor Protection, Entrepreneurship, and Capital Markets Subcommittee. He also serves on the Housing, Community Development, and Insurance Subcommittee. Mr. Huizenga shared his outlook for the Committee’s work in the 116
th
Congress, and SFIG members discussed “Valid When Made” and the Consumer Financial Protection Bureau (CFPB) v. National Student Loan Trusts case. SFIG Staff will continue to remain engaged with Members of Congress and staff on these and other matters of interest to SFIG membership. Please contact
Leslie Sack
, SFIG's Head of Government Relations, with any questions.
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SFIG Comments on ARRC's LIBOR Consultation for Securitizations
On Tuesday, February 5, SFIG delivered
comments
to the Alternative Reference Rates Committee (ARRC) on its consultation regarding fallback language for new securitization issuances. Our response to the
consultation
was developed principally by members of the SFIG LIBOR Task Force, and the views shared with the ARRC are rooted in the recommendations laid out in SFIG’s
LIBOR Task Force Green Paper
(published December 14, 2018) which sets forth industry-recommended best practices for LIBOR benchmark transition. SFIG, with CREFC, also serves as co-chair of the ARRC Securitization Working Group.
If you would like to participate on SFIG’s LIBOR Task Force, please contact
[email protected]
.
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SFIG Forms Valid-When-Made Task Force
We are launching a new task force which will focus on advancing policy solutions on the “valid-when-made” doctrine that has been called into question by the
Madden v. Midland
decision in the United States Court of Appeals for the Second Circuit. Participation on the task force will be open to any SFIG member with interest in advancing policy (regulatory and legislative) solutions that will benefit the securitization industry as a whole. If you would like to join the
Valid-When-Made Task Force
, please contact
[email protected]
.
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LIBOR Replacement Trading Limited Since Launch
According to
Risk.net
, trading of SOFR-linked derivatives has been limited since the new rate was launched in April as the U.S. LIBOR replacement. Open interest in SOFR futures had been growing prior to the end of last year, but stands at less than one percent of the notional for LIBOR-referencing eurodollar contracts. As a result, according to the article, dealers worry illiquidity could curb the adoption of the new benchmark as the fallback rate in legacy swaps contracts. “Dealers are concerned about the uptake of fallbacks if there isn’t liquidity in SOFR transactions, because customers would have to agree to fall back to a rate that isn’t widely traded,” says a member of the Alternative Reference Rates Committee. However, the article states that trading in SOFR derivatives could take off once SOFR discounting becomes mandatory and the industry creates a term SOFR.
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Powell and Trump Discuss Outlook for Economy
Federal Reserve (Fed) Chairman Jerome Powell met with President Trump on Monday, February 4, to discuss the economy’s performance and outlook, but the Fed chief did not share the President's expectations for monetary policy, according to
Bloomberg
. According to the Fed, Powell did relay to the President that monetary policy was aimed at supporting the Fed’s mandate of maximum employment and stable prices and that decisions were “based solely on careful, objective, and non-political analysis.”
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Chairman Crapo Outlines Housing Finance Reform Legislation
Last week, Senate Banking Committee Chairman Mike Crapo (R-ID) released an outline for housing finance reform legislation. Among the primary tenets of the proposal was an increased role for private capital, a level playing field for originators of all sizes, the privatization of all guarantors, and role for Ginnie Mae as the administrator of the government guarantee on eligible mortgage-backed securities. Immediately following the announcement, SFIG expressed its support for the initial step towards a legislative solution to our nation’s housing finance system via a
written statement
from Michael Bright, SFIG's President and CEO. If you are interested in participating in SFIG’s GSE Reform Task Force, please contact
[email protected]
.
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QM-Patch Resolution Required for Successful GSE Reform
According to a piece in
American Banker
, the Qualified Mortgage patch sunset could introduce legal liability for up to one third of the kind of newly-originated mortgages that currently flow through to the GSEs when it expires in 2021. The patch allows all loans guaranteed by the GSEs to automatically gain “QM” status, however if the patch expires, many of these loans would not meet the underwriting requirements defined under Appendix Q of the rule. With this in mind, the CFPB, in conjunction with legislators and regulators attempting to enact housing finance reform, must pay proper attention to a transparent and well-telegraphed conclusion to the QM Patch.
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RMBS Enforcement Workstream Call
Wednesday, February 13
10:00 a.m. - 11:00 a.m. EDT
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LIBOR Task Force Call
Wednesday, February 13
4:00 p.m. - 5:00 p.m. EDT
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SFIG Update on MISMO Private Label MBS Initiative
Thursday, February 14
3:00 p.m. - 3:30 p.m. EDT
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Announcing Arianna Huffington as WiS Keynote
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Don’t miss Arianna Huffington's keynote address at 1:00 p.m. PDT on Monday, February 25.
Arianna is the founder of
The Huffington Post
, the founder and CEO of Thrive Global, and the author of 15 books, including, most recently,
Thrive
and
The Sleep Revolution
.
Click here
to read her full biography.
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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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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.
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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