S&P Cites Possible Fixes for GFLA

The liability provisions of the Georgia Fair Lending Act could be changed in one of several different ways to address the credit concerns recently cited by Standard & Poor's Rating Services, according to the rating agency.S&P recently announced that it would not rate transactions that include loans covered by the GFLA because of the "potentially severe liability" created by the legislation's provisions on assignee liability. One approach that would satisfy S&P's concerns is the removal of assignee liability from the act, and another is the exemption from liability of securitization trusts (or other issuing vehicles) and their special-purpose entity depositors, S&P said. "A third approach would provide for the act to recognize that assignees -- who are not responsible for originating loans in the first place -- should be held to a lesser standard of liability than the originating creditors," the rating agency said. S&P can be found online at http://www.standardandpoors.com.