In late March, after considerable delay and reported behind-the-scenes interagency debate, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Department of Housing and Urban Development, the Federal Housing Finance Agency, and the Office of the Comptroller of the Currency (the “Joint Regulators”) issued a notice of proposed rulemaking (the “NPR”) that included text of a draft rule on credit risk retention in securitizations proposed to be adopted by each Joint Regulator as required by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd Frank Act”). The NPR solicited public comment on the proposed risk retention rule, and established a June 10, 2011 deadline for the submission of comments. On June 6, 2011, the Joint Regulators extended the comment deadline to August 1, 2011.

The Dodd-Frank Act requires that the section 941 credit risk retention rule be finalized by April 17, 2011 (a deadline already missed), and provides that the rule will become effective one year after publication of the final rule for residential mortgage-backed securities (“RMBS”) and two years after such publication for all other types of asset-backed securities (“ABS”). When one considers that it will likely take the Joint Regulators several months following the comment deadline to adopt a final rule, it is evident that extension of the comment period has further pushed out the effective dates of the risk retention rules considerably beyond the April 2012 (for RMBS) and April 2013 (for other ABS) effective dates originally envisioned by Congress.