July 24 U.S. financial regulators are planning
to relax a key provision that requires banks to withhold a
portion of the mortgage securities they sell to investors, the
Wall Street Journal reported, citing people familiar with the
The Federal Reserve and Federal Deposit Insurance Corp are
among regulators considering loosening rules governing
mortgage-backed securities, but nothing has been finalized yet,
the Journal said.
Changing such rules would mean unwinding the regulations
that came into effect under the 2010 Dodd-Frank law, which
mandates that banks should retain 5 percent of all
mortgage-backed securities issued without government backing.
The change would represent a victory for banks and consumer
advocates that opposed the new rules and argued that they would
restrict lending and do little to make the financial system
safer, the newspaper said.