MFA Comments on Application of Risk Retention Proposal to CLO Managers

MFA submitted comments to the Securities and Exchange Commission, Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Federal Housing Finance Agency and Department of Housing and Urban Development (collectively, the “Agencies”) on their proposal on credit risk retention.  MFA urges the Agencies to reconsider its analysis of the applicability of Section 941 of the Dodd-Frank Act to open market collateralized loan obligation (“CLO”) managers as such managers are not by definition “securitizers,” nor do they act in such capacity.  To the extent the Agencies determine that open market CLO managers fall within the scope of Section 941, MFA urges that the Agencies adopt the proposed regulatory framework set forth in the Loan Syndications and Trading Association’s letter.  MFA believes such proposal will achieve the Agencies’ objectives while significantly reducing the likely disruption to the CLO market, to commercial businesses and to investors.