WASHINGTON, June 18, 2026 – The Structured Finance Association (SFA), a leading trade association representing the structured finance and securitization industry, today released its final comment letter to the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency in response to the agencies’ revised Basel III capital proposal.
SFA welcomed the revised proposal as a meaningful improvement over the 2023 proposal and commended the agencies for taking into account concerns raised by market participants. The re-proposal reflects important progress toward a more balanced, transparent, and risk-sensitive capital framework for securitization exposures.
In particular, SFA is encouraged that the proposal does not include an increase to the securitization “p-factor,” a change that would have significantly and unnecessarily increased capital requirements for securitization exposures. SFA also supports the proposed reduction of the risk-weight floor from 20% to 15% for securitization exposures that are not resecuritization exposures, as well as the inclusion of a “look-through” approach for senior securitizations when banking organizations have adequate information on the underlying exposures.
“SFA appreciates the agencies’ continued thoughtfulness and constructive engagement throughout this process,” said Michael Bright, CEO of the Structured Finance Association. “The revised proposal reflects meaningful progress, including on several issues that are critical to the securitization market. That said, the latest proposal does introduce some new challenges with meaningful unintended consequences, and we urge the agencies to consider our points carefully. Properly calibrated capital rules are essential to ensuring that banks can continue to support liquid, efficient securitization markets while maintaining a safe and sound banking system.”
SFA’s final comment letter also recommends additional revisions before the rules are finalized. The letter urges the agencies to ensure that the final framework does not impose capital requirements that exceed the underlying risk of certain securitization exposures, reduce market liquidity, increase borrowing costs, or disadvantage U.S. banking organizations relative to international peers.
Among other recommendations, SFA asks the agencies to clarify the treatment of sponsor-provided guarantees and other limited recourse features, reconsider the proposed 100% risk-weight floor for senior resecuritizations, prevent changes in the fair value of underlying exposures from causing transactions to toggle between capital frameworks, and refine certain SEC-SA parameters to avoid unnecessary operational burdens and double counting.
“Our final comment letter provides targeted, technical recommendations to help ensure the capital framework accurately reflects the risk of securitization exposures,” said David Dwyer, General Counsel, Policy and Regulatory Affairs at SFA. “These refinements are important because even highly technical capital rules can have real effects on market liquidity, bank participation, and the availability and cost of credit for consumers and businesses.”
SFA is grateful to Mayer Brown and the members of SFA’s Basel III Task Force for the time, expertise, and months of work they devoted to developing this letter in support of a final capital framework that appropriately balances prudential objectives, risk sensitivity, market liquidity, and credit availability.
About the Structured Finance Association:
With more than 370 member institutions comprised of accounting firms, broker/dealers, diversified financial intermediaries, investors, issuers, IT vendors, law firms, mortgage insurers, other small financial institutions, rating agencies, servicers, and trustees, SFA is the leading voice for the securitization industry.
SFA is focused on helping grow the real economy and improving the lives of individuals, families, businesses, and communities across the nation; helping make credit more affordable and available to people who need it to finance some of life’s biggest goals — education, car purchases, starting a business, buying a home — or reduce their debt through consolidation loans; safeguarding essential protections for consumers and the financial system; facilitating valuable dialogue among the financial services market, its practitioners, policymakers and the broader public; and recognizing that all finance entails risk, but it should not involve recklessness.
For inquiries, please contact:
Walt Cronkite, Director of Communications at the Structured Finance Association. Walt.Cronkite@StructuredFinance.org