Proposed Rule on Assessments

SIFMA and American Securitization Forum (ASF) provide comments to the Federal Deposit Insurance Corporation (FDIC) on proposed rule on assessments, RIN 3064-AD35.  The proposal primarily concerns the U.S. covered-bond market. SIFMA argues that he benefits offered by covered bonds are threatened in a material way by the Proposed Rule by exacting a penalty on any meaningful use of covered bonds or other secured borrowings to fund mortgage loans. Instead of the proposed secured-liability adjustment, SIFMA suggests one that varies the level of assessment based on the liquidity component of an institution’s CAMELS rating. CAMELS ratings take into account (C) Capital adequacy, (A) Asset quality, (M) Management, (E) Earnings, (L) Liquidity and (S) Sensitivity to market risk.