SEC seeks to limit loan securitization conflict

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SEC seeks to limit loan securitization conflict
WASHINGTON (MarketWatch) - The Securities and Exchange Commission on Monday was set to vote on proposing rules seeking to limit conflicts of interest associated with the packaging and sale of mortgage securities and other debt instruments. The rule would prohibit banks from bundling and selling mortgage securities and engaging in a short sale of the securities or their underlying assets. The proposal seeks to implement a provision in the Dodd-Frank Act, written in response to the financial crisis of 2008. It comes after a Senate panel in April accused Goldman Sachs of selling poor quality mortgage securities and betting against them. In addition to mortgage securities, the rule would seek to limit conflicts connected to the packaging and sale of credit card loan securities or pools of auto loans.