Senate Banking Weighing CFPA, MBS Risk Retention

Senate Banking Committee members are making progress on ways to strengthen consumer protections as they continue to craft a financial regulatory reform bill, according to a committee staff director. "We are making progress on that. I am optimistic we will come up with something that advances consumer protection and allows us to move this bill forward," said Ed Silverman, who serves as the staff director for committee chairman Christopher Dodd, D-Conn. Sen. Dodd is a strong proponent for creating an independent Consumer Finance Protection Agency with rulemaking and enforcement authority. But now the chairman is considering proposals what would house a consumer protection office in the FDIC or at the Federal Reserve. "We are trying to separate issues of structure from what this agency really does. For chairman Dodd, the later is more important," Mr. Silverman told a meeting of the Institute for International Bankers. Work is also continuing on other issues, including risk retention on securitizations of mortgages and other assets, Mr. Silverman told National Mortgage News. Industry lobbyists have been raising concerns about recent changes to bank capital rules that make a legislative 5% to 10% risk retention requirement punitive for MBS issuers. "We are aware of that and we are trying to work through it," the committee staff director said.