Outgoing Federal Deposit Insurance Corporation (FDIC) Chairman Sheila C. Bair recently addressed the National Press Club in Washington, D.C., where, among other things, she touched upon a number of topics, including the debate over the Dodd-Frank Act's definition of qualified residential mortgages (QRMs). "Another Dodd-Frank mandate is a rule requiring issuers of mortgage-backed securities to retain five percent of the credit risk of the pool," said Bair. "Risk retention is necessary to give issuers a long-term interest in the performance of the underlying mortgages. But given the controversy that has surrounded this rule, I have to say I regret that Congress carved out an exemption for ultra-safe mortgages as defined by the regulatory agencies." Martin Gruenberg, current vice chairman of the Federal Deposit Insurance Corporation (FDIC), joined the FDIC board in 2005 and will take over the departing Bair's role as chairman of the FDIC. "Everyone, it seems, believes that their mortgage should receive this Qualifying Residential Mortgage, or QRM, status and thus be exempt from the small premium in their mortgage rate that will result from risk retention," said FDIC Chair Bair. "The connection they're not making is that this small extra cost is the price we must pay in the short term to put a little equity behind these mortgages, to ensure that incentives are properly aligned, and to avoid a costly repeat of the mortgage crisis in the future."