The performance of MBS and ABS looks likely to suffer, with delinquencies projected to increase and rating downgrades a possibility.

The SEC’s Office of Credit Ratings is exploring how it can address conflicts of interest in ratings of MBS and ABS. An increase in performance-related disclosures and boosting unsolicited ratings are being considered.

JPMorgan Chase has issued its first ABS transaction backed by credit card receivables through Chase Issuance Trust since May 2018. A wildcard to the deal, however, is a pending lawsuit involving the issuance trust.