Patrick McHenryChairman

Washington, October 22, 2014 - Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement on the final risk retention rule adopted by federal regulators today – three years after the rule was first proposed.  As required by the Dodd-Frank Act, the rule defines “qualified residential mortgage” (QRM) and exempts securitizations of QRMs from risk retention.

“Dodd-Frank gave regulators 270 days to prescribe regulations on risk retention, and three and a half years later those regulators are still struggling to get their act together while the housing market limps along and private capital sits on the sidelines.  This rule is one more reason why Washington bureaucrats shouldn’t be picking winners and losers in the housing finance market.  If risk retention is a good idea, it should be something that the market establishes, not that the government mandates.

“More convoluted top-down regulations from Washington aren’t going to build the sustainable housing finance system that helps Americans buy homes they can actually afford to keep.  The better solution is to repeal the Dodd-Frank Act’s risk retention provision, end the federal government’s domination of the housing finance market, and put private capital at the center of the mortgage system.  That’s exactly what the PATH Act does,” said Chairman Jeb Hensarling.

The PATH Act (Protecting American Taxpayers and Homeowners) was approved by the House Financial Services Committee last year.  Included in the PATH Act are provisions that: