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CRE Finance World, Winter 2012

The Washington Minute: 2012 Will See Finality to Many “Dodd-Frank” Rules In October 2011, Congressman Scott Garrett (R-NJ), Subcom- The outlook is promising considering that covered bonds are posi- mittee Chairman for Capital Markets and Government Sponsored tioned as a no-cost, pro-credit availability legislative item. The real Enterprises, introduced a bill that attempts to reinvigorate the unknown is whether a covered bond market could become a viable private label RMBS market. An important point to note here is that financing source, which could depend on the outcome of Dodd- if the Republicans maintain control of the House in 2012, Chairman Frank reforms and regulatory capital changes. Garrett’s bill, in combination with Vice-Chairman Jeb Hensarling’s (R-TX) bill to privatize the GSEs, will become the starting point for Get Involved! GSE reform. That said, Mr. Garrett and Mr. Hensarling, both proponents 2012 will be a critical and defining period for CRE finance. If you of privatization, will have to work with Congressmen with a similar have any doubt about the gravity of the issues facing our industry approach to that of Mr. Campbell to ensure they can muster the or the path we are taking we encourage you to get involved, as votes to move such a bill through committee. the CRE Finance Council is a member-driven organization. We in Washington are constantly asked questions by policymakers who That said, the Senate may ultimately end up producing a bill with have very little or no exposure to how the markets actually work, enough votes to move — but that will depend on the ultimate makeup and we rely on our membership to assist us in educating them on of the body after the November elections. the nuances of CRE. Debate on this issue, similar to other areas, will occur largely through Our recently instituted series of monthly meetings between CREFC the prism of the single-family market. Given the differences in Government Relations and the government relations teams of our multifamily housing, the solution for reform could (and should) Members are one important way of strengthening our voice in the easily be considered as a separate item. CRE Finance Council halls of Congress — and the more that you, our Members, become while also sharing its views as to the best role for the multifamily involved, the more success we will enjoy collectively. market going forward. If there was ever any doubt about the future of this market space, Covered Bonds one need only look to the hard work and dedication of the CREFC There is some question as to whether 2012 is the year in which members and leadership, who could not be more committed to we will finally see the creation of a U.S. covered bond market. ensuring a recovery in the sector. It is your efforts that allow us to While there is no replacement for securitization, CREFC supports function effectively as an association and to represent the entire covered bonds as an additive financing tool. Congressman Scott commercial real estate finance marketplace in Washington. Garrett (R-NJ) used the power of his Subcommittee Chairmanship to pass H.R. 940, a bipartisan covered-bond bill that CREFC has Thank you, and we look forward to your continued efforts on behalf supported, through the full House Financial Services Committee. of the industry this year! Both Chairman Garrett and CREFC are hopeful that the bill will pass the House in 2012. While Senate action is uncertain, several senior Senators have expressed interest and virtually no opposition has been raised by market participants or Members of Congress. Some concerns over jurisdiction and resolution authority were raised by regulators, but advocates are confident these can be addressed and will not slow the bill’s momentum. CRE Finance World Winter 2012 68


CRE Finance World, Winter 2012
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