Section 946 – Study on the Macroeconomic Effects of Risk Retention Requirements

Section 946 of the Dodd-Frank Wall Street Reform and Consumer Protection Act was not codified. It reads as follows:

SEC. 946. STUDY ON THE MACROECONOMIC EFFECTS OF RISK RETENTION REQUIREMENTS.

(a) Study Required.--The Chairman of the Financial Services Oversight Council shall carry out a study on the macroeconomic effects of the risk retention requirements under this subtitle, and the amendments made by this subtitle, with emphasis placed on potential beneficial effects with respect to stabilizing the real estate market. Such study shall include--

(1) an analysis of the effects of risk retention on real estate asset price bubbles, including a retrospective estimate of what fraction of real estate losses may have been averted had such requirements been in force in recent years;
(2) an analysis of the feasibility of minimizing real estate price bubbles by proactively adjusting the percentage of risk retention that must be borne by creditors and securitizers of real estate debt, as a function of regional or national market conditions;
(3) a comparable analysis for proactively adjusting mortgage origination requirements;
(4) an assessment of whether such proactive adjustments should be made by an independent regulator, or in a formulaic and transparent manner;
(5) an assessment of whether such adjustments should take place independently or in concert with monetary policy; and
(6) recommendations for implementation and enabling legislation.

(b) Report.--Not later than the end of the 180-day period beginning on the date of the enactment of this title, the Chairman of the Financial Services Oversight Council shall issue a report to the Congress containing any findings and determinations made in carrying out the study required under subsection (a).