We published the below commentary, In Defense of Securitization, last week and we are republishing it today as, let’s face it, we’re all getting very French, and many of us took most of last week off.  Enjoy, if that’s the right word.

Returning to the theme of my most recent commentary entitled God Hates Securitization, I want to elaborate on the point I made there (yes, if you stuck with me all the way through to the end, there was a point):  We need to fight the narrative that banking, finance and securitization are evil.  I am afraid that if we don’t do something here soon, we’ll wake up one morning (probably after the next cyclical downturn is underway) and find pitchfork-wielding villagers outside the gates thinking they have found Dr. Frankenstein’s monster.  Populist anger, whipped up by our critics demonizing the financial sector, unfettered from the necessity to defend these positions in the marketplace of ideas and the court of public opinion, is powerful.  That, coupled with our recent embrace of the weaponization of policy disputes enforced by both civil and criminal legal proceeding, should frighten all of us who make our living in the financial sector.  And, to be clear, it should frighten everyone who understands the importance of an efficient and liquid capital market for the continued success of the US economy.
Continue Reading Repost: In Defense of Securitization – Unto the Breach or Close the Wall Up with Our Dead (with Apologies to Mr. Shakespeare)

Returning to the theme of my most recent commentary entitled God Hates Securitization, I want to elaborate on the point I made there (yes, if you stuck with me all the way through to the end, there was a point):  We need to fight the narrative that banking, finance and securitization are evil.  I am afraid that if we don’t do something here soon, we’ll wake up one morning (probably after the next cyclical downturn is underway) and find pitchfork-wielding villagers outside the gates thinking they have found Dr. Frankenstein’s monster.  Populist anger, whipped up by our critics demonizing the financial sector, unfettered from the necessity to defend these positions in the marketplace of ideas and the court of public opinion, is powerful.  That, coupled with our recent embrace of the weaponization of policy disputes enforced by both civil and criminal legal proceeding, should frighten all of us who make our living in the financial sector.  And, to be clear, it should frighten everyone who understands the importance of an efficient and liquid capital market for the continued success of the US economy.
Continue Reading In Defense of Securitization – Unto the Breach or Close the Wall Up with Our Dead (with Apologies to Mr. Shakespeare)

Last week, the CREFC Annual Conference was back in its traditional New York venue, which benefitted not only the Manhattan hospitality market’s RevPAR but also provided for an exciting and lively location in Times Square.  Dechert’s bash on Monday evening was extremely well attended and the guests were treated to passed hors d’oeuvres and the…

The Wall Street Journal recently reported that the Papacy has denounced securitization characterizing it (in such an intellectually balanced way) as tainted by “predatory and speculative tendencies.”

Good Lord!

Now, I’m not perfect — I can’t remember the last time I participated in a black mass, inverted a crucifix or committed any of the more striking of your basic mortal sins — but I did close a securitization last week and now I’m worried.
Continue Reading God Hates Securitization?

When House Speaker Paul Ryan announced earlier this month that the House would vote on S.2155, I wasn’t holding my breath (you know you’re on your last lame duck leg when a “senior GOP lawmaker” says you’ve “run out of juice”).

Miracles do happen AND sometimes I love to be wrong (but – shh…don’t tell my husband): In the spirit of deal making, the House just passed S. 2155 (the Economic Growth, Regulatory Relief, and Consumer Protection Act) with bipartisan support (Yup – the Dems and the Republicans did this in both the House and the Senate…maybe there is more to come!). The President still needs to sign the bill before it becomes law, which everyone expects will happen soon.
Continue Reading “Pop the Champagne but Don’t Get Too Drunk”: HVCRE Reform Passes the House

In seven short years, the Consumer Financial Protection Bureau (CFPB) has managed to court controversy across the political spectrum.  Under the leadership of former Director Richard Cordray, the bureau (for better or worse) tested the limits of its jurisdiction and enforcement power in a wide range of areas, including the Home Mortgage Disclosure Act and Equal Credit Opportunity Act, student loan servicing, and let’s not forget the since-disavowed arbitration rule.  Enter new Acting Director Mick Mulvaney, who, along with the rest of the Trump administration, is sending the clearest of signals that he does not intend to “push the envelope” at the CFPB.  In short, the CFPB’s mission has turned inward—instead of policing the markets, it’s policing itself and the regulatory state, and with about the same degree of fervor.
Continue Reading D.C. Circuit to CFPB: “Go forth and conquer!” CFPB Responds: “No thanks.”

We at Dechert had our annual business meeting last week in Miami (tough duty).  Nestled in the general atmospherics of bon ami and collegiality were sessions on collaboration and connectivity amongst the lawyers in our firm.  Apparently the data suggested that law firms make more money when the partners of the firm work together.  Flash.  The mathematical proof of the blindingly obvious perhaps, but just in case, we were stentoriously and with great seriousness told that these conclusions were based on rigorous and exhaustive academic research; research undoubtedly paid for by the American taxpayer, along with other studies of similar compelling import such as why Americans don’t like lice.

But the point here is (and I’m not for an instant suggesting that making money is not a valid point) that collaboration is now essential to getting anything done right because we have all become so damn specialized.

All professionals and business folks, including those of us in Big Law, are under enormous pressure to be intensely specialized yet issues are never so neatly defined by those specializations which all too often also mark the boundaries of our intellectual domains.
Continue Reading Life in the Silo

As we all marinate in the difficulties of Mr. Zuckerberg, who, at the end of the day, can certainly salve any wounds with a net worth measured in the tens of billions of dollars, I was struck by the continued drumbeat for “REGULATION.”  Now, perhaps I am ill equipped to discuss Facebook, not being a participant and therefore never having clicked through a lengthy agreement on privacy (or the lack thereof), but I have some thoughts.  I’ll largely leave the ethics of the privacy contretemps to others, but I was struck by the parallels between the current kerfuffle over Facebook and privacy and the Dodd-Frank mess, lo these ten years past.

Let’s start with this dictum:  Beware the politician bearing new and comprehensive regulatory gifts for the American people.
Continue Reading I Hear This Cries Out for Regulation!

Morningstar has published a proposed method for rating single-asset/single-borrower (SASB) transactions. The new approach is slated to replace the “U.S. CMBS Subordination Model” with respect to SASBs and other forms of CMBS securities with similar credit and diversity profiles, including large-loan transactions and rake certificates. Morningstar has issued a request for comments on the proposal. We plan to provide our thoughts, described below, before the April 20th deadline, and encourage you to do the same. But first, answers to what are sure to be your most burning questions:
Continue Reading Morningstar Requests Comments on Proposed Rating Methodology for SASB Deals

It’s day 2 of Mark Zuckerberg’s Congressional debut and I still have yet to catch a glimpse of him or his entourage. But – I have had the opportunity, with some fellow industry players, CREFC staff and members of the CREFC-HVCRE Working Group, to meet and speak with members of the House Financial Services Committee (Andy Barr and Trey Hollingsworth), Senate Banking Committee staff and regulators from the FDIC, OCC and the Fed. The topic on hand: not Facebook or Russia, but HVCRE and HVADC.
Continue Reading The Day I (Almost) Met Mark Zuckerberg