We attended a full day session at the OCC in Washington D.C. last week about responsible innovation. It was essentially a 300+ person discussion around the March white paper the OCC produced (HERE). We give the OCC props for organizing this first class workshop that brought lawyers, fintech, banks, community activists, consultants and regulators together to exchange ideas.
Last week the boys and girls at the Joint Regulators (The FFIEC, plus SEC, HUD and others) rolled out the final rule (Final Rule) set (found HERE) that structures risk retention under Section 941 of the Dodd-Frank Act for bank assets destined for securitizations.
If you were a financial institution on the frontier during the late 1700’s you had an exchange rate for beaver pelts. Sometimes you didn’t trade any beaver pelts, or some problem customer brought in some deer skins to trade for cash and you had to either make up a beaver pelt rate or do some esoteric conversion in order to have an accurate index rate to base some of your deposit and lending activities on. Well, the beaver pelt problem isn’t all that different than our modern rate structure with LIBOR, Fed Funds and Prime, which is why it is changing.