Bloomberg News

U.S. Regulators Extend Comment Deadline For Risk-Retention Rule

June 07, 2011

June 7 (Bloomberg) -- U.S. regulators extended the comment period for Dodd-Frank Act risk-retention rules that could make it more difficult or expensive for borrowers to get mortgages.

The Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp., Securities and Exchange Commission, the Federal Housing Finance Agency and the Department of Housing and Urban Development announced the extension in a statement today. The comment period, which was to end June 10, was extended to Aug. 1.

Dodd-Frank, the regulatory overhaul enacted last year, requires lenders and bond issuers to keep a 5 percent stake in loans they bundle for sale to investors. Forcing the industry to share potential losses was meant to rein in risky lending and avoid mistakes that led to a flood of subprime mortgages, which helped trigger the 2008 financial collapse.

The law requires regulators to exempt home loans that are deemed safe, including those with fixed interest rates and long repayment terms.

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net


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