Responding to the nationwide economic downturn facilitated by the ongoing credit crisis; MHI joined a business coalition to send a letter to Secretary Elizabeth M. Murphy of the U.S. Securities and Exchange Commission.

The organizations represent a diverse range of industries that rely on a well-functioning and liquid money market to support their financing needs. The group commends the U.S. Securities and Exchange Commission (SEC) for proposing amendments to the Investment Company Act of 1940, but opposes the proposed amendment to prohibit money market funds from investing in securities that carry the second highest credit rating. Companies that issue A2/P2 commercial paper are large well-established corporations and such action would have a negative and unintended impact on the capital formation that far outweighs any speculative increase in investor protection. Allowing money market funds to buy A2/P2 paper can help fund the commercial paper marketplace which helps fund dealer floor plan lending for manufactured housing.

We will continue to closely monitor this issue and keep members apprised of any new developments. If you are a MHI member and have questions, contact Brian Cooney at brian@mfghome.org or Rae Ann Bevington at rbevington@mfghome.org.