[Federal Register Volume 89, Number 98 (Monday, May 20, 2024)]
[Notices]
[Pages 43976-43979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10998]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
Agency Information Collection Activities: Information Collection
Renewal; Comment Request; Credit Risk Retention
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.
ACTION: Notice and request for comment.
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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork
and respondent burden, invites comment on a continuing information
collection, as required by the Paperwork Reduction Act of 1995 (PRA).
In accordance with the requirements of the PRA, the OCC may not conduct
or sponsor, and the respondent is not required to respond to, an
information collection unless it displays a currently valid Office of
Management and Budget (OMB) control number. The OCC is soliciting
comment concerning the renewal of its information collection titled,
``Credit Risk Retention.''
DATES: Comments must be received by July 19, 2024.
ADDRESSES: Commenters are encouraged to submit comments by email, if
possible. You may submit comments by any of the following methods:
Email: [email protected].
Mail: Chief Counsel's Office, Attention: Comment
Processing, Office of the Comptroller of the Currency, Attention: 1557-
0249, 400 7th Street SW, Suite 3E-218, Washington, DC 20219.
Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
Fax: (571) 293-4835.
Instructions: You must include ``OCC'' as the agency name and
``1557-0249'' in your comment. In general, the OCC will publish
comments on www.reginfo.gov without change, including any business or
personal information provided, such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the
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public record and subject to public disclosure. Do not include any
information in your comment or supporting materials that you consider
confidential or inappropriate for public disclosure.
Following the close of this notice's 60-day comment period, the OCC
will publish a second notice with a 30-day comment period. You may
review comments and other related materials that pertain to this
information collection beginning on the date of publication of the
second notice for this collection by the method set forth in the next
bullet.
Viewing Comments Electronically: Go to www.reginfo.gov.
Hover over the ``Information Collection Review'' tab and click on
``Information Collection Review'' from the drop-down menu. From the
``Currently under Review'' drop-down menu, select ``Department of
Treasury'' and then click ``submit.'' This information collection can
be located by searching OMB control number ``1557-0249'' or ``Credit
Risk Retention.'' Upon finding the appropriate information collection,
click on the related ``ICR Reference Number.'' On the next screen,
select ``View Supporting Statement and Other Documents'' and then click
on the link to any comment listed at the bottom of the screen.
For assistance in navigating www.reginfo.gov, please
contact the Regulatory Information Service Center at (202) 482-7340.
FOR FURTHER INFORMATION CONTACT: Shaquita Merritt, Clearance Officer,
(202) 649-5490, Chief Counsel's Office, Office of the Comptroller of
the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf,
hard of hearing, or have a speech disability, please dial 7-1-1 to
access telecommunications relay services.
SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501 et seq.),
Federal agencies must obtain approval from the OMB for each collection
of information that they conduct or sponsor. ``Collection of
information'' is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) to
include agency requests or requirements that members of the public
submit reports, keep records, or provide information to a third party.
Section 3506(c)(2)(A) of title 44 generally requires Federal agencies
to provide a 60-day notice in the Federal Register concerning each
proposed collection of information, including each proposed extension
of an existing collection of information, before submitting the
collection to OMB for approval. To comply with this requirement, the
OCC is publishing notice of the renewal/revision of this collection.
Title: Credit Risk Retention.
OMB Control No.: 1557-0249.
Description: This information collection request relates to 12 CFR
part 43, which implemented section 941(b) of the Dodd-Frank Act.\1\
Section 941(b) of the Dodd-Frank Act required the OCC, Board of
Governors of the Federal Reserve System (Board), Federal Deposit
Insurance Corporation (FDIC), Securities and Exchange Commission (SEC),
and, in the case of the securitization of any residential mortgage
asset, the Federal Housing Finance Agency (FHFA), and the Department of
Housing and Urban Development (HUD) (collectively, the agencies) to
issue rules that, subject to certain exemptions: require a securitizer
to retain not less than 5% of the credit risk of any asset that the
securitizer, through the issuance of an asset-backed security,
transfers, sells, or conveys to a third party; and prohibit a
securitizer from directly or indirectly hedging or otherwise
transferring the credit risk that the securitizer is required to retain
under the statute and implementing regulations.
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\1\ Dodd-Frank Wall Street Reform and Consumer Protection Act
(Pub. L. 111-203, 124 Stat. 1376 (July 21, 2010)).
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Part 43 sets forth permissible forms of risk retention for
securitizations that involve the issuance of asset-backed securities.
Section 15G of the Exchange Act also exempts certain types of
securitization transactions from these risk retention requirements and
authorizes the agencies to exempt or establish a lower risk retention
requirement for other types of securitization transactions. Section 15G
also states that the agencies must permit a securitizer to retain less
than five percent of the credit risk of commercial mortgages,
commercial loans, and automobile loans that are transferred, sold, or
conveyed through the issuance of ABS by the securitizer if the loans
meet underwriting standards established by the Federal banking
agencies.\2\
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\2\ 15 U.S.C. 78o-11(c)(1)(B)(ii) and (2).
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Part 43 sets forth permissible forms of risk retention for
securitizations that involve issuance of asset-backed securities, as
well as exemptions from the risk retention requirements, and contains
requirements subject to the PRA.
Section 43.4 sets forth the conditions that must be met by sponsors
electing to use the standard risk retention option, which may consist
of an eligible vertical interest or an eligible horizontal residual
interest, or any combination thereof. Sections 43.4(c)(1) and
43.4(c)(2) specify the disclosures required with respect to eligible
horizontal residual interests and eligible vertical interests,
respectively.
A sponsor retaining any eligible horizontal residual interest (or
funding a horizontal cash reserve account) is required to disclose: the
fair value (or a range of fair values and the method used to determine
such range) of the eligible horizontal residual interest that the
sponsor expects to retain at the closing of the securitization
transaction (Sec. 43.4(c)(1)(i)(A)); the material terms of the
eligible horizontal residual interest (Sec. 43.4(c)(1)(i)(B)); the
methodology used to calculate the fair value (or range of fair values)
of all classes of ABS interests (Sec. 43.4(c)(1)(i)(C)); the key
inputs and assumptions used in measuring the estimated total fair value
(or range of fair values) of all classes of ABS interests (Sec.
43.4(c)(1)(i)(D)); the reference data set or other historical
information used to develop the key inputs and assumptions (Sec.
43.4(c)(1)(i)(G)); the fair value of the eligible horizontal residual
interest retained by the sponsor (Sec. 43.4(c)(1)(ii)(A)); the fair
value of the eligible horizontal residual interest required to be
retained by the sponsor (Sec. 43.4(c)(1)(ii)(B)); a description of any
material differences between the methodology used in calculating the
fair value disclosed prior to sale and the methodology used to
calculate the fair value at the time of closing (Sec.
43.4(c)(1)(ii)(C)); and if the sponsor retains risk through the funding
of an eligible horizontal cash reserve account, the amount placed by
the sponsor in the horizontal cash reserve account at closing, the fair
value of the eligible horizontal residual interest that the sponsor is
required to fund through such account, and a description of such
account (Sec. 43.4(c)(1)(iii)).
For eligible vertical interests, the sponsor is required to
disclose: the form of the eligible vertical interest (Sec.
43.4(c)(2)(i)(A)); the percentage that the sponsor is required to
retain as a vertical interest (Sec. 43.4(c)(2)(i)(B)); a description
of the material terms of the vertical interest and the amount the
sponsor expects to retain at closing (Sec. 43.4(c)(2)(i)(C)); and the
amount of vertical interest retained by the sponsor at closing, if that
amount is materially different from the amount disclosed ((Sec.
43.4(c)(2)(ii)).
Section 43.4(d) requires a sponsor to retain the certifications and
disclosures required in paragraphs (a) and (c) of this section in its
records and must provide the disclosure upon request to the Commission
and the sponsor's
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appropriate Federal banking agency, if any, until three years after all
ABS interests are no longer outstanding.
Section 43.5(k) requires sponsors relying on the master trust (or
revolving pool securitization) risk retention option to disclose: the
material terms of the seller's interest and the percentage of the
seller's interest that the sponsor expects to retain at the closing of
the transaction (Sec. 43.5(k)(1)(i)); the amount of the seller's
interest that the sponsor retained at closing, if that amount is
materially different from the amount disclosed (Sec. 43.5(k)(1)(ii));
the material terms of any horizontal residual interests offsetting the
seller's interest under Sec. 43.5(g), Sec. 43.5(h) and Sec. 43.5(i)
(Sec. 43.5(k)(1)(iii)); and the fair value of any horizontal residual
interests retained by the sponsor (Sec. 43.5(k)(1)(iv)). Additionally,
a sponsor must retain the disclosures required in Sec. 43.5(k)(1) in
its records and must provide the disclosure upon request to the
Commission and the sponsor's appropriate Federal banking agency, if
any, until three years after all ABS interests are no longer
outstanding (Sec. 43.5(k)(3)).
Section 43.6 addresses the requirements for sponsors utilizing the
eligible ABCP conduit risk retention option. The requirements for the
eligible ABCP conduit risk retention option include disclosure to each
purchaser of ABCP and periodically to each holder of commercial paper
issued by the ABCP conduit of the name and form of organization of the
regulated liquidity provider that provides liquidity coverage to the
eligible ABCP conduit, including a description of the material terms of
such liquidity coverage, and notice of any failure to fund; and with
respect to each ABS interest held by the ABCP conduit, the asset class
or brief description of the underlying securitized assets, the standard
industrial category code for each originator-seller that retains an
interest in the securitization transaction, and a description of the
percentage amount and form of interest retained by each originator-
seller (Sec. 43.6(d)(1)). An ABCP conduit sponsor relying upon this
section shall provide, upon request, to the Commission and the
sponsor's appropriate Federal banking agency, if any, the information
required under Sec. 43.6(d)(1), in addition to the name and form of
organization of each originator-seller that retains an interest in the
securitization transaction (Sec. 43.6(d)(2)).
A sponsor relying on the eligible ABCP conduit risk retention
option shall maintain and adhere to policies and procedures to monitor
compliance by each originator-seller which is satisfying a risk
retention obligation in respect to ABS interests acquired by an
eligible ABCP conduit (Sec. 43.6(f)(2)(i)). If the ABCP conduit
sponsor determines that an originator-seller is no longer in
compliance, the sponsor must promptly notify the holders of the ABCP,
and upon request, the Commission and the sponsor's appropriate Federal
banking agency, in writing of the name and form of organization of any
originator-seller that fails to retain, and the amount of ABS interests
issued by an intermediate SPV of such originator-seller and held by the
ABCP conduit (Sec. 43.6(f)(2)(ii)(A)(1)); the name and form of
organization of any originator-seller that hedges, directly or
indirectly through an intermediate SPV, its risk retention in violation
of the rule, and the amount of ABS interests issued by an intermediate
SPV of such originator-seller and held by the ABCP conduit (Sec.
43.6(f)(2)(ii)(A)(2)); and any remedial actions taken by the ABCP
conduit sponsor or other party with respect to such ABS interests
(Sec. 43.6(f)(2)(ii)(A)(3)).
Section 43.7 sets forth the requirements for sponsors relying on
the commercial mortgage-backed securities risk retention option and
includes disclosures of: the name and form of organization of each
initial third-party purchaser (Sec. 43.7(b)(7)(i)); each initial
third-party purchaser's experience in investing in commercial mortgage-
backed securities (Sec. 43.7(b)(7)(ii)); other material information
(Sec. 43.7(b)(7)(iii)); the fair value and purchase price of the
eligible horizontal residual interest retained by each initial third-
party purchaser and the fair value of the eligible horizontal residual
interest that the sponsor would have retained if the sponsor had relied
on retaining an eligible horizontal residual interest under the
standard risk retention option (Sec. 43.7(b)(7)(iv) and (v)); a
description of the material terms of the eligible horizontal residual
interest retained by each initial third-party purchaser, including the
same information as is required to be disclosed by sponsors retaining
horizontal interests pursuant to Sec. 43.4 (Sec. 43.7(b)(7)(vi)); the
material terms of the applicable transaction documents with respect to
the Operating Advisor (Sec. 43.7(b)(7)(vii)); and representations and
warranties concerning the securitized assets, a schedule of any
securitized assets that are determined not to comply with such
representations and warranties and the factors used to determine that
such securitized assets should be included in the pool notwithstanding
that they did not comply with the representations and warranties (Sec.
43.7(b)(7)(viii)). A sponsor relying on the commercial mortgage-backed
securities risk retention option is also required to provide in the
underlying securitization transaction documents certain provisions
related to the Operating Advisor (Sec. 43.7(b)(6)), to maintain and
adhere to policies and procedures to monitor compliance by third-party
purchasers with regulatory requirements (Sec. 43.7(c)(2)(i)), and to
notify the holders of the ABS interests in the event of noncompliance
by a third-party purchaser with such regulatory requirements (Sec.
43.7(c)(2)(ii)).
Section 43.8 requires that a sponsor relying on the Federal
National Mortgage Association and Federal Home Loan Mortgage
Corporation risk retention option must disclose a description of the
manner in which it has met the credit risk retention requirements
(Sec. 43.8(c)).
Section 43.9 sets forth the requirements for sponsors relying on
the open market CLO risk retention option, and includes disclosures of
a complete list of, and certain information related to, every asset
held by an open market CLO (Sec. 43.9(d)(1)) and the full legal name
and form of organization of the CLO manager (Sec. 43.9(d)(2)).
Section 43.10 sets forth the requirements for sponsors relying on
the qualified tender option bond risk retention option and includes
disclosures of the name and form of organization of the qualified
tender option bond entity, a description of the form and subordination
features of the retained interest in accordance with the disclosure
obligations in section 43.4(c), the fair value of any portion of the
retained interest that is claimed by the sponsor as an eligible
horizontal residual interest, and the percentage of ABS interests
issued that is represented by any portion of the retained interest that
is claimed by the sponsor as an eligible vertical interest (Sec.
43.10(e)(1)-(4)). In addition, to the extent any portion of the
retained interest claimed by the sponsor is a municipal security held
outside of the qualified tender option bond entity, the sponsor must
disclose the name and form of organization of the qualified tender
option bond entity, the identity of the issuer of the municipal
securities, the face value of the municipal securities deposited into
the qualified tender option bond entity, and the face value of the
municipal securities retained outside of the qualified tender option
bond entity by the sponsor or its majority-owned affiliates (Sec.
43.10(e)(5)).
Section 43.11 sets forth the conditions that apply when the sponsor
of a securitization allocates to originators of securitized assets a
portion of the credit
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risk the sponsor is required to retain, including disclosure of the
name and form of organization of any originator that acquires and
retains an interest in the transaction, a description of the form,
amount and nature of such interest, and the method of payment for such
interest (Sec. 43.11(a)(2)). A sponsor relying on this section is
required to maintain and adhere to policies and procedures that are
reasonably designed to monitor originator compliance with retention
amount and hedging, transferring and pledging requirements (Sec.
43.11(b)(2)(i)), and to promptly notify the holders of the ABS
interests in the transaction in the event of originator non-compliance
with such regulatory requirements (Sec. 43.11(b)(2)(ii)).
Sections 43.13 and 43.19(g) provide exemptions from the risk
retention requirements for qualified residential mortgages and
qualifying 3-to-4 unit residential mortgage loans that meet certain
specified criteria, including that the depositor with respect to the
securitization transaction certify that it has evaluated the
effectiveness of its internal supervisory controls and concluded that
the controls are effective (Sec. Sec. 43.13(b)(4)(i) and 43.19(g)(2)),
and that the sponsor provide a copy of the certification to potential
investors prior to sale of asset-backed securities in the issuing
entity (Sec. Sec. 43.13(b)(4)(iii) and 43.19(g)(2)). In addition,
Sec. Sec. 43.13(c)(3) and 43.19(g)(3) provide that a sponsor that has
relied upon the exemptions will not lose the exemptions if, after
closing of the transaction, it is determined that one or more of the
residential mortgage loans does not meet all of the criteria; provided
that the depositor complies with certain specified requirements,
including prompt notice to the holders of the asset-backed securities
of any loan that is required to be repurchased by the sponsor, the
amount of such repurchased loan, and the cause for such repurchase.
Section 43.15 provides exemptions from the risk retention
requirements for qualifying commercial loans that meet the criteria
specified in Sec. 43.16, qualifying CRE loans that meet the criteria
specified in Sec. 43.17, and qualifying automobile loans that meet the
criteria specified in Sec. 43.18. Section 43.15 also requires the
sponsor to disclose a description of the manner in which the sponsor
determined the aggregate risk retention requirement for the
securitization transaction after including qualifying commercial loans,
qualifying CRE loans, or qualifying automobile loans with 0 percent
risk retention (Sec. 43.15(a)(4)). In addition, the sponsor is
required to disclose descriptions of the qualifying commercial loans,
qualifying CRE loans, and qualifying automobile loans (``qualifying
assets''), and descriptions of the assets that are not qualifying
assets, and the material differences between the group of qualifying
assets and the group of assets that are not qualifying assets with
respect to the composition of each group's loan balances, loan terms,
interest rates, borrower credit information, and characteristics of any
loan collateral (Sec. 43.15(b)(3)). Additionally, a sponsor must
retain the disclosures required in Sec. Sec. 43.15(a) and (b) in its
records and must provide the disclosure upon request to the Commission
and the sponsor's appropriate Federal banking agency, if any, until
three years after all ABS interests are no longer outstanding (Sec.
43.15(d)).
Sections 43.16, 43.17 and 43.18 each require that: the depositor of
the asset-backed security certify that it has evaluated the
effectiveness of its internal supervisory controls and concluded that
its internal supervisory controls are effective (Sec. Sec.
43.16(a)(8)(i), 43.17(a)(10)(i), and 43.18(a)(8)(i)); the sponsor is
required to provide a copy of the certification to potential investors
prior to the sale of asset-backed securities in the issuing entity
(Sec. Sec. 43.16(a)(8)(iii), 43.17(a)(10)(iii), and 43.18(a)(8)(iii));
and the sponsor must promptly notify the holders of the asset-backed
securities of any loan included in the transaction that is required to
be cured or repurchased by the sponsor, including the principal amount
of such loan and the cause for such cure or repurchase (Sec. Sec.
43.16(b)(3), 43.17(b)(3), and 43.18(b)(3)). Additionally, a sponsor
must retain the disclosures required in Sec. Sec. 43.16(a)(8),
43.17(a)(10) and 43.18(a)(8) in its records and must provide the
disclosure upon request to the Commission and the sponsor's appropriate
Federal banking agency, if any, until three years after all ABS
interests are no longer outstanding (Sec. 43.15(d)).
Type of Review: Regular.
Affected Public: Businesses or other for-profit.
Estimated Frequency of Response: On occasion.
Estimated Number of Respondents: 35.
Estimated Total Annual Burden: 2,835 hours.
Comments submitted in response to this notice will be summarized
and included in the request for OMB approval. All comments will become
a matter of public record. Comments are invited on:
(a) Whether the collection of information is necessary for the
proper performance of the functions of the OCC, including whether the
information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the
collection of information;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected;
(d) Ways to minimize the burden of the collection on respondents,
including through the use of automated collection techniques or other
forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Patrick T. Tierney,
Assistant Director, Office of the Comptroller of the Currency.
[FR Doc. 2024-10998 Filed 5-17-24; 8:45 am]
BILLING CODE 4810-33-P