It appears that the Federal regulators (comprised of the Securities Exchange Commission, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency) will shortly announce the long awaited proposed regulations requiring lenders to retain an economic interest in loans they securitize.

The proposed regulations, which are part of the recently enacted Dodd-Frank Act, will prove a lightening rod for industry commentread that as complaint. Feature issues will relate to the potential impact on lenders’ balance sheets and ability to make new loans, potential increased costs to borrowers, the role of the B-piece buyers in performing due diligence and maintaining some investment in the loans, and the like—anything to reduce or eliminate lenders being the ones having to maintain “skin in the game.”

Reading the comment letters from the industry will be instructive to say the least. When it’s all said and done, expect the lenders to take at least a partial victory lap having shifted the risk of holding some portion of the loans originated to a third party.