Acronyms (colloquial) SMMEA Statutes at Large 98 Stat. 1689 | Public law Pub.L. 98–440 | |
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Long title An Act To amend the Securities Exchange Act of 1934 with respect to the treatment of mortgage backed securities, to increase the authority of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, and for other purposes. Enacted by the 98th United States Congress | ||
The Secondary Mortgage Market Enhancement Act of 1984 (SMMEA) was an Act of Congress intended to improve the marketability of private label mortgage-backed security passthroughs.
It declared nationally recognized statistical rating organization (NRSRO) AA-rated mortgage-backed securities to be legal investments equivalent to Treasury securities and other federal government bonds for federally chartered banks (such as federal savings banks, federal savings associations, etc.), state-chartered financial institutions (such as depository banks and insurance companies) unless overridden by state law before October 1991 (of which 21 states did so), and Department of Labor-regulated pension funds. It is mentioned as a significant contributing factor in the subprime mortgage crisis.