Risk Retention Proposal for Residential Mortgages Comes into Focus

Federal regulators have set the stage for a robust public debate and comment period on their proposed risk retention rules under Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). Many constituencies have recognized that the final form of these rules has the potential to have a significant impact on the cost and availability of a wide range of consumer and commercial credit, including residential mortgages. On May 13, 2011, fifteen groups representing both financial services industry participants and consumers requested that the comment period on the proposed rules be extended from June 10, 2011 to July 22, 2011.

The of the most discussed aspects of the proposed rules is their impact on the availability of residential mortgages. See our March DechertOnPoint "Risk Retention and Residential Mortgages: Legislation, Regulation and Economics" for additional information. In this update, we focus on the scope of the exception