*Decisions Reached at the Last Meeting
At the July 26, 2006 meeting, the Board continued redeliberations on the August 2005 revised Exposure Draft, Accounting for Transfers of Financial Assets. In these redeliberations, the Board decided to address issues pertaining to the permitted activities of a QSPE jointly by combining discussions and decisions related to servicer discretion (formerly a separate project on the Board’s agenda) with the transfers project.
Transfers of Financial Assets
*Summary of Tentative Decisions
Note: The servicer discretion project has now been combined with the transfers of financial assets project (please see the Transfers of Financial Assets website for decisions relating to the permitted activities of a QSPE).
The Board decided to add a project to its agenda to provide interpretive guidance with respect to the passive nature of a qualifying SPE, with a focus on servicer discretion in permitted activities. Specifically, the Board decided:
- That the project should attempt to provide clarification and guidance related to paragraph 35(b) of Statement 140 in a principles-based fashion
- That the fact patterns discussed below should be used as examples of the application of the principles-based guidance developed to demonstrate how one should evaluate the activities that are permitted for a qualifying SPE
- To issue the interpretive guidance as an FSP.
The following activities were presented to the Board as examples of activities for which interpretive guidance may be useful. Currently, constituents have different views as to whether these activities are appropriate for a servicer considering the provisions of paragraph 35(b):
- The ability to waive a due-on-sale provision
- The substitution of collateral with respect to a loan held by a qualifying SPE
- The permitted activities in connection with a sale of real estate temporarily held by a qualifying SPE.
The Board agreed to the staff’s recommendation to form a working group consisting of representatives of the commercial and residential mortgage securitization industry, accounting firms, the PCAOB, banking regulators, and the SEC to solicit information and provide input to the staff prior to presenting any recommendations to the Board.
*Board Meeting and Public Meeting Dates
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final Statement, Interpretation, or FSP.
The following are links to the minutes for each meeting.
