March 15, 2019 | Issue 274
What We're Watching
Kraninger Testifies Before Senate Banking Committee

Earlier this week, Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger testified before the Senate Committee on Banking, Housing, and Urban Affairs to deliver the Bureau’s semi-annual report to Congress. The hearing focused on similar topics covered in last week’s House Financial Services Committee, where Kraninger was also questioned, including the structure and management of the CFPB, data and privacy, student loan debt, Military Lending Act supervisory authority, and the payday lending rule.
Regulators Considering Another Volcker Rule Rewrite

Financial regulators are redrafting a Volcker Rule replacement after industry participants overwhelmingly refusedthe May 2018 proposal to ease trading restrictions created by the rule. The May 2018 proposal, created by the Federal Reserve (Fed), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC) – was criticized by bank executives as being too onerous and argued that it could stifle trading in certain asset classes as well as create compliance problems. While regulators have not officially decided to scrap the proposal, sources familiar with the issue say that regulators are leaning towards redoing it, according to the Wall Street Journal . Regardless, SEC Chairman Jay Clayton stated that a Volcker Rule rewrite would be completed by the end of the year. 
Japanese Regulators Plan to Release a New Rule Impacting U.S. Loan Market

Japanese regulators from the Financial Services Agency (FSA) are set to release a new risk retention rule which will impact the U.S. CLO market. Originally released as a draft in late December 2018, the FSA rule will establish new capital requirements for investments in CLOs if originators of these assets don’t retain a stake in them. However, the FSA also indicated that it would be willing to grant exemptions to this rule if buyers can prove that the products were made appropriately. Based on an early draft of the rule, CLO buyers would have to evaluate, among other things, credit ratings, screening standards, and loan collateral. Last year, total U.S. CLO issuance reached $130.4 billion. 
Fed Chairman: No Hurry to Change Rates

Federal Reserve Chairman Jerome Powell said that interest rate hikes can remain on hold as the Fed waits to see how conditions abroad evolve, with no clear time limit to their current pause, according to Bloomberg .

The Fed will be watching developments on growth, job creation, wages, and inflation, as well as geopolitical factors including Brexit and China's economic development. "Patient means that we don't feel any hurry to change our interest-rate policy," Powell said.
Conforming Mortgages Increasingly Securitized via PLS Market

According to an article in The Wall Street Journal , an increasing number of mortgages eligible for delivery to the Government-Sponsored Enterprises ( GSE) are being securitized through the private market. The volume of agency-eligible loans funded through private channels has more than doubled since 2016 issuance in 2017 and 2018 volumes reaching $4 billion and $3.9 billion in issuance, respectively. 
SFIG Look Ahead
LIBOR Task Force Call
Wednesday, March 20
4:00 p.m. - 5:00 p.m. EST
GSE Reform Committee
Thursday, March 21
2:00 p.m. - 3:00 p.m. EST
Significant Risk Transfer Committee Call
Friday, March 22
1:00 p.m. - 2:00 p.m. EST
SFIG Events
Registration Now Open - SFIG Canada 2019

Registration is now open for SFIG Canada 2019, taking place May 22-23, at the Fairmont Royal York, conveniently located in the main financial hub of Toronto. Click here to view conference details.

SFIG Canada 2019
May 22-23, 2019
Fairmont Royal York
100 Front Street W
Ontario, Canada
Interested in sponsoring?
Click here to view SFIG Canada 2019 sponsorship opportunities.

Questions? Email .
SFIG Legal Forum 2019 Speaker Nominations

Speaker nominations are open for the SFIG Legal Forum 2019. The event will take place on Tuesday, June 4, at Mayer Brown's office in New York, NY. Nominations close on Wednesday, March 20.

Click here  to view panel topics and to nominate.