Financial Industry Week In Review (August 12, 2013)

Financial Industry Developments

FHFA Input on Freddie Mac and Fannie Mae Multifamily Businesses

On August 9, the FHFA announced that it is seeking public input on strategies to reduce Fannie Mae and Freddie Mac's presence in the multifamily housing market and is seeking input on various proposed alternatives. Input must be received within 60 days or not later than October 8. FHFA Release and Proposal.

Broker-Dealers: The New Frontier for SEC Enforcement

The SEC adopted new rules designed to increase protections for customers who invest money and securities with broker-dealers. Recent rulemaking and statements made by the SEC have highlighted the fact that broker-dealer regulation is becoming a growing area of SEC interest. In connection with Wednesday's vote, SEC Chair Mary Jo White stated that "[i]nvestors need to feel confident that their money is safe when it's being held by their broker-dealers... [and] these rules will strengthen the audit requirements for broker-dealers and enhance [the SEC's] oversight of the way they maintain custody over their customer's needs." The new rules amend the broker-dealer reporting and notification rules codified in Section 17 and Rules 17a-5 and 17a-11 of the Exchange Act. They also require that the broker-dealer let the SEC review the work-papers of the accountant, if requested. For more information and to visit our Securities Litigation blog, please click here.

Rating Agency Developments

On August 9, Fitch released its U.S. RMBS re-REMIC criteria. Fitch Report.

On August 9, Fitch released its U.S. RMBS loan loss model criteria. Fitch Report.

On August 8, Fitch released its criteria for rating corporate CDOs. Fitch Report.

On August 7, Fitch released its criteria for analyzing multiborrower pools of commercial real estate (CRE) loans with U.S. CMBS transactions. Fitch Report.

On August 5, Fitch released its criteria for rating currency swap obligations of an SPV in structured finance transactions and covered bonds. Fitch Report.

On August 2, Fitch released its criteria for repackaged senior structured finance notes. Fitch Report.

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RMBS and Other Securities Litigation

SEC and DOJ File Parallel Civil Suits Alleging BofA Defrauded RMBS Investors

On August 6, the SEC and the U.S. Department of Justice filed parallel civil suits against several Bank of America affiliates, alleging that the bank defrauded investors in connection...