To provide for credit risk retention requirements for commercial mortgages.

SA 3992. Mr. CRAPO proposed an amendment to amendment SA 3956
proposed by Ms. Landrieu (for herself, Mr. Isakson, Mrs. Hagan, Mr.
Warner, and Mr. Menendez) to the amendment SA 3739 proposed by Mr. Reid
(for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to
promote the financial stability of the United States by improving
accountability and transparency in the financial system, to end ``too
big to fail'', to protect the American taxpayer by ending bailouts, to
protect consumers from abusive financial services practices, and for
other purposes; as follows:

On page 1 of the amendment, strike line 3 and all that
follows through page 3, line 7, and insert the following:
``(i) a portion of the credit risk for any asset that is
transferred, sold, or conveyed through the issuance of an
asset-backed security by the securitizer; or
``(ii) a reduced portion or no portion of the credit risk
for an asset described in clause (i), if the originator of
the asset meets the underwriting standards prescribed under
paragraph (2)(B) or subsection (e)(4);
``(C) specify--
``(i) the permissible types, forms, and amounts of risk
retention that would meet the requirements of subparagraph
(B), including--

``(I) retention of--

``(aa) a specified amount or percentage of the total credit
risk of the asset;
``(bb) the value of securities sold to investors; or
``(cc) the interest of the seller in revolving assets;

``(II) retention of the first-loss position by a third-
party purchaser that specifically negotiates for the purchase
of such first-loss position and provides due diligence on all
individual assets in the pool before the issuance of the
asset-backed securities;
``(III) a determination by a Federal banking agency or the
Commission that the underwriting standards and controls of
the originator are adequate for risk retention purposes; and
``(IV) provision of adequate representations and warranties
and related enforcement mechanisms; and

``(ii) the minimum duration of the risk retention required
under this section;
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