I 111th CONGRESS 1st Session H. R. 1731 IN THE HOUSE OF REPRESENTATIVES March 26, 2009 Mr. Minnick introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Truth in Lending Act to require any creditor who transfers, sells, or conveys certain residential mortgage loans to third parties to retain an economic interest in a material portion of the credit risk for any such loan, and for other purposes.

1.

Short title

This Act may be cited as the Credit Risk Retention Act of 2009.

2.

Credit risk retention

Section 129 of the Truth in Lending Act (U.S.C. 1639) is amended by adding at the end the following new subsection: (m)

Credit risk retention

(1)

In general

The Federal banking agencies shall prescribe regulations jointly to require any creditor that makes a residential mortgage loan that is not a qualified mortgage (as defined by such agencies) to retain an economic interest in a material portion of the credit risk for any such loan that the creditor transfers, sells, or conveys to a third party. (2)

Standards for regulations

Regulations prescribed under paragraph (1) shall— (A)apply only to residential mortgage loans that are not qualified mortgages (as so defined); (B)prohibit creditors from directly or indirectly hedging or otherwise transferring the credit risk creditors are required to retain under the regulations with respect to any residential mortgage loan; and (C)require creditors to retain at least 5 percent of the credit risk on any non-qualified mortgage that is transferred, sold or conveyed. .