ELFA Urges Adoption of Risk Retention Framework



On June 8, the Equipment Leasing and Finance Association (ELFA) filed a comment letter on the Dodd-Frank credit risk retention NPRM with the Securities and Exchange Commission, the Office of the Comptroller of the Currency of the Department of Treasury, the Federal Reserve Board and the Federal Deposit Insurance Corporation.

In summary, ELFA is urging regulators to establish a workable framework for equipment finance securitizations as ELFA remains concerned about the potential impact of credit risk-retention regulations on the equipment finance securitization and syndications markets. Specifically, ELFA has recommended that the regulators modify the risk-retention proposal so that the new rules 1.) conform to typical investor requirements for risk retention in our industry and 2.) reflect the realities of equipment lease and loan securitization.

The submission points out that there are reasonable approaches to securitizer risk retention that would utilize current Equipment ABS investor practices and reflect the intent of Congress. The letter also advocates that the final risk retention regulations should recognize that the variety of risk retention devices used in Equipment ABS comply with the guidelines of the Dodd-Frank Act. The final regulations should avoid micromanaging traditional Equipment ABS in a way that constricts access of equipment financiers to the capital markets and hence denies commercial and personal users the most advantageous financing for their equipment needs, argues ELFA.

To read the full ELFA letter click here.


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Terry Mulreany
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