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FDIC Board Approves Revisions to Securitization Safe Harbor Rule

October 23, 2015

At a meeting on October 22, 2015 of the Board of Directors for the Federal Deposit Insurance Corporation, the FDIC Board approved a final rule regarding Treatment of Financial Assets Transferred in Connection with a Securitization or Participation (the “Final Rule”). 

The Final Rule revises certain provisions of 12 C.F.R. 360.6 (the “Securitization Safe Harbor”). The Securitization Safe Harbor sets forth criteria under which, in its capacity as a receiver or conservator of an insured depository institution, the FDIC will not, in the exercise of its authority to repudiate contracts, recover or reclaim financial assets transferred in connection with securitization transactions.

The Final Rule clarifies certain requirements of the Securitization Safe Harbor with respect to the retention of an economic interest in securitized financial assets in connection with the effectiveness of the credit risk retention regulations adopted under Section 15G of the Securities Exchange Act (published at 79 FR 77602, the “Section 15G Regulations”).

For a copy of the Final Rule, please click here.