On March 20th, Senate Banking Chairman Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH) issued a public request for legislative proposals to foster economic growth. Responses, which had to be substantive, explain the impact on the economy and consumers, and include legislative language, were due on April 14th. Responding to the request, the LSTA submitted this comment letter that explained the role of CLOs in providing nearly $450 billion of financing to companies that employ more than 7 million people in the U.S. The letter discussed the Dodd-Frank Act, and how the final rule applied risk retention to the managers of Open Market CLOs, even though i) these are not the originate-to-distribute securitizations Dodd-Frank targeted and ii) CLO managers don’t own the assets being securitized (unlike originate to distribute securitizations) and therefore actually have to buy notes in order to “retain” them. Furthermore, we observed that in the horizontal retention option, the final rule required far more than the 5% credit risk retention that the Dodd-Frank Act mandated.
Letter to Foster Economic Growth

Downloads
Sorry but this content is only available to certain members. If you believe you have access, try logging in.
- 0414clet-with-attachments.pdf 474 KB
Letter to Foster Economic Growth
474.39 KB
Nice to see you again
WELCOME BACK
Sign in to access your account, manage your downloads, and explore all the features available to you.
Login Account
Enter your credentials to access your account and continue where you left off.