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  "notes": "The slide argues that SoFi retains effective control over transferred assets, violating the third criterion of ASC 860.",
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      "kind": "paragraph",
      "text": "First, OWLCX models a default rate ceiling of approximately 4.3% on its asset-backed finance portfolio... Second, OWLCX's description of 'Robust Protection' does not distinguish between securitized and unsecuritized loans... Third, the Clifford Chance paper notes that in a pure forward flow arrangement, the funder is 'entirely on risk for the asset's performance.'",
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      "text": "Loan transfers are evaluated under ASC 860 (Transfers and Servicing). A transfer qualifies as a sale only if all three criteria are satisfied. If any test fails, the transaction must be recorded as secured borrowing.",
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      "kind": "paragraph",
      "text": "support a strong inference that SOFI provides credit protection across the entire program, not just the securitized slice.",
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      "text": "The LPB transactions seem to fail the effective control test. SOFI retains a security interest through its first-loss residual positions, services all loans, sponsors all securitizations, and—as demonstrated in Section IV—has the ability to restructure the disposition of loans at will.",
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      "text": "46 OWLCX 2025 Annual Report, p.37... 47 Morningstar DBRS, SCLP 2026-1 presale report... 48 Clifford Chance, 'Forward Flow Securitisation: The Right Tool for the Right Job?', September 2023.",
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      "text": "Legal isolation: Assets are isolated from the transferor even in bankruptcy; Transferee rights: Buyer can pledge or exchange the assets; No effective control: Seller does not retain control or obligation to repurchase",
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      "text": "D. ASC 860 Analysis: These Are Not True Sales",
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