In September 2010, the BCBS released the third Basel Capital  Accord (“Basel III”) guidelines, which will increase the  capital requirements of certain banking or ganizations. Implementation of Basel III requires formal regulations, and in  December 2010, the BCBS released a new bank capital framework (“Basel III capital adequacy guidelines”) that is intended to  significantly raise minimum capital requirements for banks. Implementation of the Basel III capital adequacy guidelines in the  U.S. requires three federal banking regulators to issue legally binding rules. In June 2012, the federal regulators released  proposed rules to implement Basel III. The proposed Basel III rules would, among other things, assign risk-weightings based on  a residential mortgage’s LTV ratio. However, the proposed rules do not recognize private mortgage insurance as a factor that  reduces risk for high LTV loans and therefore, a loan with a 5% down payment that is insured by private mortgage  insurance would be considered as having a 95% L TV for minimum capital requirement purposes.  Additionally, while private  mortgage insurance is not recognized, FHA-insured loans retain a risk weighting of zero, which could make FHA-insured loans  more attractive than privately-insured loans for those loans held for investment.  The deadline for comments on the proposed  rules ended in October 2012. The federal regulators have not yet finalized the rules.  While the timing for the final rulemaking is  unclear, currently it is expected to be finalized in the first half of 2013.  The new rules are likely to significantly increase the  capital requirements for mortgages and thus, could further limit the mortgage market and delay the recovery of the housing  market.  The Dodd-Frank Act may have a material effect on our mortgage insurance and financial guaranty businesses.  The Dodd-Frank Act contains many new requirements and mandates significant rulemaking by several regulatory  agencies to implement the Act’s provisions. Therefore, the full scope of the Dodd-Frank  Act and its impact on our mortgage  insurance and financial guaranty businesses remain uncertain.  The Dodd-Frank Act, among other things:  •  establishes the CFPB to regulate the offering and provision of consumer financial products and services, including  residential mortgages, under federal law;  •  requires securitizers to retain some of the risk associated with mortgage loans that they transfer , sell or convey,  unless the mortgage loans are QRMs or are insured by the FHA  or another federal agency . The Dodd-Frank Act  provides that the definition of QRMs will be determined jointly by six separate regulators, with consideration to be  given, among other things, to the presence of mortgage insurance. In March 201 1, regulators released a proposed  rule that would only include loans with a 20% down payment in the QRM definition and exempts from the risk  retention requirement FHA-insured loans and loans guaranteed by the GSEs while the GSEs are in conservatorship.  The proposed rule, however, does not include an explicit exemption for loans that are insured by private mortgage  insurance, other than with respect to the GSE exemption mentioned above. Substantially all of our primary RIF  includes loans for which the down payment was less than 20%. For information regarding the percentage of our  primary RIF by LTV, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and  Results of Operations—Results of Operations—Mortgage Insurance— NIW, Insurance in Force, RIF .” •  authorizes regulators to issue regulations prohibiting a creditor from making a residential mortgage loan unless the  creditor makes a reasonable and good faith determination that, at the time the loan is consummated, the consumer  has a reasonable ability to repay the loan. The Dodd-Frank Act provides that a creditor may presume that a  borrower will be able to repay a loan if the loan has certain low-risk characteristics that meet the definition of a  QM.  Given the volume of comments that the regulators received in response to its proposed QRM definition and the  number of regulators involved in this determination, we cannot be certain when the final QRM rule will be issued  or the form it may take;  On January 10, 2013, the CFPB issued the final rule that contains the ability to repay requirements and QM  standards. The final rule will become effective on January 10, 2014. Loans that meet the definition of a QM under  the rule will receive either a rebuttable or conclusive presumption of compliance with the rule’ s ability to repay  requirements depending upon the pricing of the loan relative to average prime of fer rate. Most notably for the  private mortgage insurance industry , the new rule establishes a temporary alternative QM definition applicable to  any loans that are eligible to be purchased, guaranteed or insured by the GSEs, FHA,  VA, USDA or RHS, as  applicable, and that satisfy certain requirements with regard to avoiding risky loan features (e.g., no negative  amortization and generally no balloons or interest-only features) and a strict limitation on points and fees.  With  regard to GSE-eligible loans, the temporary alternative QM definition will expire on the earlier of seven years from  the effective date of the rule or when GSE conservatorship or receivership ends.  With respect to loans eligible for  insurance or guaranty by the FHA, VA, USDA or RHS, the temporary alternative definition expires seven years  after the effective date of the rule (unless the respective agencies establish dif ferent definitions). 82