U.S. federal court limits reach of credit risk retention regulations

On February 9, 2018, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) issued a major decision regarding credit risk retention requirements. Following the 2007-2008 financial crisis, Congress passed the Dodd-Frank Act (“Dodd-Frank”) in an effort to avert a future crisis and as part of this reform, Dodd-Frank required securitizers to retain 5% of the credit risk of the assets sold into the securitization. This…