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Image: Bloomberg News

Four Takeaways from Trump's First Budget

By Ian McKendry and John Heltman

President Trump’s budget would reduce funds to the Consumer Finance Protection Bureau, cut spending for several programs aimed at providing financial services and resources in underserved communities, and eliminate a fund designed to help regulators unwind a failing megabank..


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Latest News

There's a Downside to Deregulation for CLOs

– Rolling back risk retention rules in the U.S. risks undoing harmonization with EU rules, complicating dual compliance, there are also complications for some managers who pursued workarounds for certain deals.

Investor Panel Sees No End to Retailers' Struggles

– The concern is particularly significant for investors with exposure to over-leveraged chain stores like Sears, Macy’s, Nieman Marcus, Payless Shoesource and Gymboree, among dozens of others. Estimates are default rates in retail could reach 9% by year’s end.

Mixed Signals on CFPB Constitutionality from Appeals Court Justices

– Appeals court justices appeared divided on whether the structure of the Consumer Financial Protection Bureau is constitutional during oral arguments in the PHH v. CFPB case on Wednesday.

SeaCube Adds to Fleet of Shipping Container ABS

– The transaction is the fourth this year backed by container leases, following a pause the previous two years. Other issues include a $300 million transaction by Textainer; a $196 million deal by Seaco, and a $281 million transaction by TAL International.

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Featured Articles

Mixed Signals on CFPB Constitutionality from Appeals Court Justices

– Appeals court justices appeared divided on whether the structure of the Consumer Financial Protection Bureau is constitutional during oral arguments in the PHH v. CFPB case on Wednesday.

Large CMBS Loans Are Being Carved Up to Spread Risk, but…

– ... The trend of putting ever-smaller pieces of the same commercial mortgages into multiple securitizations requires investors to be extra careful, and will inevitably make workouts of bad loans more complicated.

Dodd-Frank Left a Lot to Regulators’ Discretion. Why that Matters Now

– The ability of federal agencies to interpret the Volcker Rule and other provisions of the Dodd-Frank Act could be a positive for advocates of deregulation.

Why Regulators Waited Years Before Hitting Ocwen Again

– State regulators felt they were strung along by the mortgage servicing giant Ocwen Financial after years of promises that were never fulfilled, resulting in successive enforcement actions against the company.

SoFi’s Bid to Become an Industrial Bank Pulls FDIC into Fintech Fray

– The Federal Deposit Insurance Corp. has so far managed to stay out of the growing battle over how the U.S. fintech sector should be regulated, but that appears likely to end as one of the nation’s largest online lenders announced plans to apply for a specialty banking charter soon.

What Relief from Volcker Rule Could Mean for CLOs

– Acting Comptroller of the Currency Keith Noreika is floating the possibility of reinterpreting the Volcker Rule, which could allow collateralized loan obligations to resume investing in high yield bonds without losing their biggest customers - U.S. banks.

FHFA on Collision Course with Congress over Fannie, Freddie

– During testimony before the Senate Banking Committee on Thursday, Watt warned that to prevent a potential draw on the Treasury Department by the government-sponsored enterprises, he is willing to act unilaterally to rebuild capital at Fannie and Freddie.

President's Words Matter, Even for Student Loan Litigation

– Maintaining a federal class action concerning consumer rights has been historically difficult when there is a pending, competing government action; this could change as a result of President Trump's desire to dismantle the Consumer Finance Protection Bureau.

How Risk Retention is Bringing New Capital into CLO Market

– Rules requiring managers of collateralized loan obligations to keep “skin in the game” of deals are creating new opportunities for investors to participate in this market.

How Technology Mitigated a Crisis in Student Loan ABS

– Navient and Nelnet, the two largest student loan servicers, avoided downgrades on some $18 billion of bonds by extending their maturities. Getting the required consents from investors would normally take ages, but recent innovations speeded the process.

Bill Would Ease Restrictions on Construction Lending

– The bill, sponsored by Congressman Robert Pittenger (R-NC) and Congressman David Scott (D-GA), would clarify rules that critics say have caused banks to pull back from construction lending, hurting credit availability and driving loans into risky, unregulated sectors.

Subprime Auto Lenders Put on Notice Over Shady Dealers

– A $26 million settlement by Santander Consumer is shining a light on the hard-to-measure problem of auto dealer fraud, while also raising questions about the adequacy of lenders' efforts to combat bad behavior

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CLO Managers Holding Out Hope for Regulatory Relief

Some are wording the language of amendments used to refinance deals so as to be able to benefit if risk retention rules are repealed.

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