SIFMA today issued the following statement from Ken Bentsen, executive vice president, public policy and advocacy, on the Senate Banking Subcommittee’s hearing on the state of the securitization markets:
“SIFMA welcomes the Senate Banking Subcommittee on Securities, Insurance and Investment holding a hearing on the state of the securitization markets. Securitization has been a crucial financing tool for providing credit to every sector of the general economy, yet the market continues to be hampered by a lack of investor confidence and overall uncertainty surrounding the future of the system. It is essential that this market sector be revitalized, as it is a vital source of affordable credit for consumers and small businesses.
“SIFMA is concerned that certain elements of the recently proposed rules on risk retention as prescribed by the Dodd-Frank Act could negatively impact the market going forward. In particular, we believe the premium capture provisions have the potential to eliminate securitization as a source of funding in many markets by effectively regulating, and diminishing, the profitability of securitization transactions, in a manner well beyond what is economical for securitization sponsors.
“Without a robust securitization market, consumers and businesses will continue to face limitations on the availability of affordable credit which will have a negative impact on our economic recovery.
“Policymakers, regulators and industry must work together to ensure a securitization system that serves the public by properly incentivizing all parties to the transaction, from the originator to the investor.”
