A bipartisan group of senators, Bob Corker (R-Tenn.), Mike Crapo (R-Idaho), Kay Hagan (D-NC), and Charles Schumer (D-NY), today sponsored new legislation that would set up a covered bond framework in the U.S.
The bill is nearly identical to the one that passed the Financial Service Committee of the U.S. House of Representatives in June. “The House version was heavily vetted so I think that made it easier for the Senate to pick up something that closely mirrored it,” said Ralph Daloisio, MD at Natixis and a champion of having a covered bond legislation.
Law firm Morrison & Foerster put out a succint commentary on the legislation, which is attached as a PDF.
Daloisio said that at the House the legislation is still awaiting confirmation from the Ways and Means Committee, which is looking over taxation aspects of the bill. He added that basically the committee is determining whether a separate covered bond estate would be a taxable entity — the conclusion in Daloisio’s view should be that it would not be. “Once that’s settled through the House Ways and Means Committee it’ll be cleared for a floor vote,” he said. And a vote would help push momentum behind the companion legislation in the Senate.