FOR IMMEDIATE RELEASE
ICBA Statement on Proposed Risk Retention Rules
San Diego, Calif. (March 29, 2011)-The Independent Community Bankers of America (ICBA) today issued the following statement regarding the proposed rule implementing the risk retention requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The FDIC approved the proposed rule for comment today, and other regulators are expected to follow suit this week.
"The nation's nearly 5,000 Main Street community banks have always been and continue to be common-sense lenders who use sound underwriting standards in underwriting their customers' residential mortgage loans. That is why the mortgages originated by community banks have significantly lower default and delinquency rates than the industry as a whole.
"The proposed rule is over 300 pages and contains scores of questions. ICBA will carefully review the proposal. This is the beginning of the process, not the end. However, overall, for the community banking industry, there are many positive provisions in the proposal.
"ICBA is very pleased that the proposed rule includes an exemption from the qualified residential mortgage standards and risk retention requirements for loans sold to Fannie Mae and Freddie Mac, as long as they have government capital. The vast majority of residential mortgages originated by community banks are conforming loans sold to Fannie Mae and Freddie Mac. Today's action would preserve the ability of community banks to continue to provide their customers with long-term mortgages.
"ICBA is also pleased that the proposed rule does not impact mortgage loans held in portfolio and focuses the risk retention requirement on securitizers, not originators.
"The proposal also contains loan-servicing standards that ICBA will carefully review to ensure that they, along with other provisions, do not place an undue burden on community banks and their ability to serve their customers responsibly.
"ICBA looks forward to working with the agencies to ensure that any final rule does not inhibit the flow of credit on Main Street and allows community banks to continue to serve their local customers with safe and solid mortgage financing."