Finance Council to Congress: Use Your Heads Implementing Dodd-Frank

WASHINGTON, DC-The Senate Committee on Banking, Housing & Urban Affairs held a hearing on the state of the securitization markets. Testifying to the committee was Lisa Pendergast, president of the CRE Finance Council. Her message was succinct and blunt: please take care in crafting the rules that will implement Dodd-Frank, as they could have a detrimental impact on the budding CMBS market.

Yes, she noted, there is $35 billion in CMBS expected to be issued this year, compared to $12 billion last year. That, though, is still minuscule compared to the $240 billion issued in 2007. More to the point, Congress could inadvertently render the CMBS market unviable if they do not take a deliberative approach in crafting final rules for such provisions as risk retention, she said–especially if they rush to meet a statutorily imposed rulemaking deadline.