Covered Bonds: 2011 –The Senate

Finally! The important second leg of the legislation is on the table. The long awaited covered bond bill was introduced in the U.S. Senate today. The bill, "The United States Covered Bond Act of 2011,"¹ was introduced by Senator Kay Hagan (D-NC) and Senator Bob Corker (R-TN) and co-sponsored by Chuck Schumer (D-NY) and Mike Crapo (R-ID). The language of the bill is very close to H.R. 940 that passed the House Financial Services Committee on a bipartisan vote of 44-7 in June.²

In a release accompanying the introduction, Senator Hagan said, "This bill would level the playing field for U.S. financial institutions and help strengthen our U.S. economy." Senator Schumer said, "With the housing market still struggling to recover, covered bonds are a common sense solution that can help bring private capital back into the housing market."