Developments in Asset-Backed Securitizationsince Dodd–Frank: An Assessment of theRegulatory Landscape

Abstract

Enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in July 2010 heralded fundamental change for the U.S. financial regulatory system, including the asset-backed securitization industry and credit rating agencies. Congress left it to the regulatory agencies to finalize Dodd-Frank’s requirements through administrative rulemakings, but they are experiencing difficulty meeting the Act’s ambitious deadlines. As far as ABS industry participants are concerned, the Securities and Exchange Commission will issue most of the relevant rulemakings. The problem is particularly acute for the SEC, which is responsible for adopting more than 100 rulemakings and conducting more than 20 studies. There is a tension inherent in the rulemaking process: The SEC must adopt rules within tight timeframes to provide certainty as to how the industry may conduct its business but not at the risk of unintended and unanticipated consequences that can result from haste. With the one-year anniversary of Dodd–Frank approaching, this article takes stock of where we are in the rulemaking process, reviewing what has been finalized, what remains outstanding, what has slipped behind, and areas of controversy for the ABS industry. <b>TOPICS:</b>Asset-backed securities (ABS), legal and regulatory issues for structured finance