The Might of the Pen: A Lookback on 2020 SFA Written Advocacy

Written by:

• Jen Earyes, Head of Policy, Structured Finance Association 

Policymakers turn to the Structured Finance Association to gain market insight and hear perspectives from subject matter experts. 2020 brought new challenges cultivated by the unique circumstances resulting from the novel COVID-19 pandemic.

The rapid onset of global events conflated into an environment presenting challenges to financial markets in remarkable volumes at an extraordinary pace. While developing solutions to restore vibrancy in markets and responsibly stabilize access to credit, policymakers looked to practitioners within SFA’s membership.

The rapidly changing environment of 2020 called for an approach that allowed more public, on-record advocacy. SFA more frequently utilized written advocacy – which includes comment letters, amicus briefs, presentations, and e-mail correspondence – as a crucial component of its overall advocacy on a variety of issues within the structured finance markets. Written advocacy provides an opportunity to bring awareness to market challenges and collaborate in the public forum, allowing market stakeholders to share perspectives critical to the health of our markets. Sometimes, these efforts involve SFA collaborating with other organizations in advocacy on issues where views are shared.

In addition to the hundreds of meetings and thousands of emails across stakeholders, SFA engaged in dozens of written advocacy efforts in 2020 with demonstrable policy results.

Take a look at some of the 2020 SFA written advocacy efforts:

• OCC VWM Proposal (Jan 22)
  Letter supporting proposed rule codifying Valid-When-Made doctrine
• FDIC Federal Interest Rate Authority Proposal (Feb 5)
  Letter supporting proposed rule codifying Valid-When-Made doctrine
• Solutions to Power the Advancement & Revitalization of Consumer Credit (Mar 22)
  Letter requesting the expansion of assets qualifying under TALF
• COVID-19 Relief Letter (Mar 22)
  Letter highlighting the critical importance of the borrower assistance and origination-oriented policy accommodations
• ARRC Spread Adjustment Consultation (Mar 25)
  Letter presenting SFA member preferences on SOFR spread adjustment calculation methodology
• Uniform Delay of CECL (Mar 25)
  SFA requesting implementation delay of new CECL accounting standards beyond pandemic
• Proposed Revisions to Covered Funds Rule (Apr 2)
  SFA recommending technical corrections to accommodate securitization activities
• Tax Guidance on COVID-19 Homeowner Assistance Programs (Apr 3)
  SFA requesting that the IRS and Treasury provide tax guidance on mortgages and REMICS due to impact of COVID-19 forbearance and modifications
• Treatment of Mortgage Forbearance in CRT Bonds (May 27)
  SFA letter requesting FHFA to direct GSEs to classify mortgage loans subject to the CARES Act forbearance as performing for CRT bonds, similar to the treatment for Agency bonds
• Supplemental ARRC Spread Adjustment Consultation (Jun 15)
  SFA presenting preferences on further SOFR spread adjustment calculation methodology
• Support for EU Securitization Guidance (Jun 30)
  SFA expressing support for the European Commission High Level Forum recommendation on EU institutional investor due diligence requirements
• NCSLT Delaware Chancery Court Amicus Brief (Jun 30)
  Brief educating the Court on certain foundational tenets of securitization
• CFPB v. National Collegiate Student Loan Trusts Amicus Brief (Jul 20)
  Brief supporting essential investor contractual rights
• Hertz Bankruptcy Amicus Brief (Jul 13)
  Amicus educating the Court on how a ruling could have far reaching impact
• QM Patch Extension (Aug 10)
  SFA expressing support for the CFPB proposal to extend Patch and recommending overlap period of 6 months to aid in transition/minimize disruptions
• Capital Treatment of NPL Securitizations (Aug 21)
  Joint trade letter regarding BCBS’s technical amendment on the capital treatment of securitizations of non-performing loans (NPL)
• Response to FHFA: Suspend Implementation of Proposed GSE Capital Rule (Aug 31)
  Letter highlighting broad industry concerns about particular aspects of the proposed GSE capital rules
• True Lender Proposal (Sep 3)
  SFA supporting responsible implementation of true lender proposal
• Response to CFPB on QM Definition (Sep 8)
  SFA detailing our proposal for industry SRO to allow for innovation while establishing and maintaining safeguards for borrowers and investors
• SFA Response to CFPB on Seasoned QM Definition (Oct 1)
  SFA requesting the CFPB clarify technical aspects of the proposed rule
• Letter to Treasury on PSPAs, Releasing GSEs from Conservatorship Prematurely (Nov 23)
  SFA calling on Treasury to not prematurely release GSEs from conservatorship
• McCarthy v. ICE Joint Trade Amici (Dec 10)
  Joint amicus brief with the Chamber of Commerce, SIFMA, ISDA, BPI, and LSTA imploring the Court to not grant the request to immediately cease the use of LIBOR
• Response to FIMSAC Recommendations (Dec 22)
  Letter providing feedback to FIMSAC’s recommendations regarding the current credit rating process
• Extension of Time Period for COVID Forbearance-related Relief (Dec 22)
  Letter requesting extension of relief provided by IRS and Treasury on tax impact of COVID-19-related loan forbearance and modifications