Covered Bonds: 2011 –The House II

June 22nd Markup Hearing

At a markup hearing on Wednesday, June 22, 2011, the House Financial Services Committee once again passed covered bond legislation, sending it to the House floor for a vote of the full House.¹ The bill was approved by a comfortable margin of 44 to 7, reflecting the strong bi-partisan support for covered bonds, but this masked the tension and close voting on a pair of amendments sponsored by Congressman Barney Frank at the request of the FDIC. It seems, therefore, that the legislation stands a good chance of adoption by the full House if and when it is voted on.

Prior to the introduction of the Frank amendments, amendments were introduced by Congresswoman Carolyn Maloney² (D-NY), Congressman John Campbell (R-CA) and Congressman Scott Garrett (R-NJ).³ Mrs. Maloney's amendment⁴ responded to an FDIC concern by extending from 180 days to one year the period for the FDIC to find another bank to assume a covered bond program of a failed bank.