As expected, the board of directors at the Federal Deposit Insurance Corp. (FDIC) voted today to extend the deadline of the securitization ‘Safe Harbor’ past the originally set March 31 issuance deadline this year until September 30, 2010. Under the safe harbor, assets being transferred for securitization cannot be seized by the FDIC if the issuing firm fails or is taken over in receivership. The rule is meant to promote a sustainable future securitization market, although investors are not completely convinced. Under the FDIC proposals, investors fear they may bear the burden of loss if any of the securitization preconditions are not satisfied by the sponsor. On Nov. 12, 2009, the FDIC Board approved a transitional safe harbor that permanently grandfathered securitizations in process through March 31, 2010. These securitizations would have previously qualified under the original safe harbor adopted in 2000, however recent changes to accounting standards changed that. Under the new rules, most securitizations no longer meet the off-balance sheet standards for sale accounting treatment and, as a result, no longer comply with the preconditions for the application of the original FDIC safe harbor. Today’s announcement extends the exception safe harbor provides. In an e-mailed statement, FDIC chair Sheila Bair said that feedback from the industry is still being considered: “We will continue to seek broad agreement on securitization reforms that can be implemented by all the regulatory agencies,” she said. “As we consider the feedback received during the comment period, our focus must remain on protecting the Deposit Insurance Fund from suffering the losses created during the current crisis by misaligned incentives in mortgage finance.” Write to Jacob Gaffney.