On March 15, 2010, Senator Christopher Dodd (D-Connecticut), Chairman of the Committee on Banking, Housing and Urban Affairs of the U.S. Senate (the “Senate Banking Committee”), released a draft of a financial reform bill to be entitled the “Restoring American Financial Stability Act of 2010” (the “Dodd Bill”).

The Dodd Bill represents Senator Dodd’s second proposal of major financial reform legislation during the 111th Congress. His first attempt took the form of a discussion draft, the “Restoring American Financial Stability Act of 2009,” released on November 10, 2009 (the “November Senate Proposal”). One month following the release of the November Senate Proposal, on December 10, 2009, the U.S. House of Representatives passed its own version of major financial reform legislation, the “Wall Street Reform and Consumer Protection Act of 2009,” often referred to as the “Wall Street Reform Act” (the “House Bill”). All three versions of proposed financial reform legislation contain provisions intended to reform the securitization markets, focusing principally on the concept of “credit risk retention” that would require originators and securitizers of financial assets to retain a portion of the credit risk of securitized financial assets or, in more popular terms, to have “skin in the game.”