Asset-Backed Securities Facilitation Act

The Asset-Backed Securities Facilitation Act governs securitization — the practice of transferring financial assets such as receivables, loans, or other rights to payment to a separate entity that issues securities backed by them. Its central mechanism addresses the legal effect of that transfer: property conveyed in a qualifying securitization transaction is treated as having passed absolutely out of the transferor's ownership, so it is no longer the transferor's property or part of its estate should the transferor later become insolvent. The act also sets out how its own provisions are to be construed, giving parties greater certainty that a securitization structured under it will be respected as written.

Editorial summary generated from the text of this act. It is not part of the statute — read the sections below for the operative language.