FDIC responds: Safe harbor "crystal clear" for CMBS
The Federal Deposit Insurance Corp. stood by the clarity in its final safe harbor rule for commercial mortgage-backed securitizations in an emailed statement to HousingWire. A recent exchange between Sen. Bob Corker (R-Tenn.) and Sheila Bair, chairman of the FDIC, caused confusion at trade body CRE Finance Council as to how the final safe harbor rule pertains to CMBS. According to a letter sent by John D'Amico, CEO of CRE Finance Council, the FDIC has not issued guidance on the rule, which Bair told Corker did not apply to CMBS. But Mike Krimminger, deputy to the chairman for policy at the FDIC, wrote to HousingWire that he was surprised how the CRE Finance Council could not understand the language in the rule. "The rule is crystal clear that risk retention applies to CMBS transactions, along with all other securitizations," Krimminger wrote. "Similarly, Dodd-Frank includes CMBS as an asset class for which the agencies are instructed to complete underwriting and risk retention standards." "The CRE Finance Council points to an exchange between Chairman Bair and Senator Corker that is not grounds for confusion," he wrote. D'Amico pointed out that regulations under Dodd-Frank would become effective two years after the date they are published, meaning the new regulations under the law would not supplant safe-harbor rules until 2013. But Krimminger said once interagency standards are final, they will govern risk retention under the FDIC rule as well. "For purposes of our Rule, we would consider final publication as the 'effective' date even if final applicability to non-bank sponsors of securitizations is delayed," Krimminger wrote. Jacob Gaffney contributed to this report. Write to Jon Prior.