Attendance at the ABS East conference hit a record this week even as industry participants are anticipating a recession. Parts of the ABS market are offering investors better returns than corporate debt.

When servicing on auto ABS transferred earlier this year following the failure of two issuers, delinquencies on the deals spiked. Months later, defaults remain well above the levels seen before the transfers.

Federal Reserve examiners didn’t do enough to prevent the failure of Silicon Valley Bank, according to the Fed’s IG. Now, the Fed is working to address interest rate risk tied to bank holdings of MBS and ABS.

Members of the National Association of Insurance Commissioners defended NAIC’s plan to allow state insurance commissioners to overrule the ratings assigned to MBS and ABS held by insurance companies.

SFA published best practices for ESG disclosures for residential MBS and auto ABS. The association is starting with a limited number of disclosures and plans to expand the effort.

Issuance of auto ABS in the third quarter of 2023 has topped issuance from the second quarter. Issuers are seeing strong demand from investors despite rising defaults. An auto worker strike is also introducing some uncertainty.

A pending proposal led by the Federal Reserve could see big banks facing higher capital requirements on their holdings of securities classified as available-for-sale.

SEC staff are considering revisions to a proposed rule that would prohibit conflicts of interest in the securitization market. But the agency reportedly won’t budge on some portions of the rule.

Another subprime auto ABS issuer closed its dealerships last week. Back-up servicers can help to protect investors from failing issuers, though there were some complications with a recent servicing transfer.

Speakers on a recent dv01 panel said unemployment would be a key factor in performance moving forward. Unsecured consumer loans are demonstrating some weakness, while auto performance is normalizing.