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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5823 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 5823

To establish a covered bond regulatory oversight program, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 22, 2010

Mr. Garrett of New Jersey (for himself, Mr. Kanjorski, and Mr. Bachus) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

_______________________________________________________________________

                                 A BILL

 
To establish a covered bond regulatory oversight program, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``United States Covered Bond Act of 
2010''.

SEC. 2. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Ancillary asset.--The term ``ancillary asset'' means--
                    (A) any interest rate or currency swap associated 
                with an eligible asset, substitute asset, or other 
                asset in a cover pool;
                    (B) any credit enhancement or liquidity arrangement 
                associated with an eligible asset, substitute asset, or 
                other asset in a cover pool;
                    (C) any guarantee, letter-of-credit right, or other 
                secondary obligation that supports any payment or 
                performance on an eligible asset, substitute asset, or 
                other asset in a cover pool; and
                    (D) any proceeds of, or other property incident to, 
                an eligible asset, substitute asset, or other asset in 
                a cover pool.
            (2) Corporation.--The term ``Corporation'' means the 
        Federal Deposit Insurance Corporation.
            (3) Cover pool.--The term ``cover pool'' means a dynamic 
        pool of assets that is comprised of--
                    (A) eligible assets from a single eligible asset 
                class; and
                    (B) any substitute assets or ancillary assets.
            (4) Covered bond.--The term ``covered bond'' means any 
        senior recourse debt obligation of an eligible issuer that--
                    (A) has an original term to maturity of not less 
                than 1 year;
                    (B) is secured by a perfected security interest in 
                a cover pool that is owned directly or indirectly by 
                the issuer of the obligation;
                    (C) is issued under a covered bond program that has 
                been approved by the covered bond regulator and is 
                identified in a register of covered bonds maintained by 
                the covered bond regulator; and
                    (D) is not a deposit.
            (5) Covered bond program.--The term ``covered bond 
        program'' means any program of an eligible issuer under which 1 
        or more series or tranches of covered bonds may be issued.
            (6) Covered bond regulator.--The term ``covered bond 
        regulator'' means the Comptroller of the Currency.
            (7) Eligible asset.--The term ``eligible asset'' means--
                    (A) in the case of the residential mortgage asset 
                class--
                            (i) any first-lien mortgage loan that is 
                        secured by 1-to-4 family residential property 
                        and that is in compliance with any rule or 
                        supervisory guidance of a Federal agency that 
                        is applicable to the loan at the time of loan 
                        origination;
                            (ii) any mortgage loan insured under the 
                        National Housing Act (12 U.S.C. 1701 et seq.), 
                        or any loan guaranteed, insured, or made under 
                        chapter 37 of title 38, United States Code; and
                            (iii) rural housing loans;
                    (B) in the case of the home equity asset class, any 
                home equity loan that is secured by 1-to-4 family 
                residential property and that is in compliance with any 
                rule or supervisory guidance of a Federal agency that 
                is applicable to the loan at the time of loan 
                origination;
                    (C) in the case of the commercial mortgage asset 
                class, any commercial mortgage loan (including any 
                multifamily mortgage loan) that is in compliance with 
                any rule or supervisory guidance of a Federal agency 
                that is applicable to the loan at the time of loan 
                origination;
                    (D) in the case of the public sector asset class--
                            (i) any security issued by a State or 
                        municipality;
                            (ii) any loan made to a State or 
                        municipality; and
                            (iii) any loan, security, or other 
                        obligation that is insured or guaranteed, in 
                        full or substantially in full, by the full 
                        faith and credit of the United States 
                        Government (whether or not such loan, security, 
                        or other obligation is also part of another 
                        eligible asset class);
                    (E) in the case of the auto asset class, any auto 
                loan or lease that is in compliance with any rule or 
                supervisory guidance of a Federal agency that is 
                applicable to the loan or lease at the time of loan or 
                lease origination;
                    (F) in the case of the student loan asset class, 
                any student loan (whether guaranteed or nonguaranteed) 
                that is in compliance with any rule or supervisory 
                guidance of a Federal agency that is applicable to the 
                loan at the time of loan origination;
                    (G) in the case of the credit or charge card asset 
                class, any extension of credit to a person under an 
                open-end credit plan that is in compliance with any 
                rule or supervisory guidance of a Federal agency that 
                is applicable to the extension of credit at the time 
                the extension is made;
                    (H) in the case of the small business asset class, 
                any loan made or guaranteed under a program of the 
                Small Business Administration; and
                    (I) in the case of any other eligible asset class, 
                any asset designated by the covered bond regulator, by 
                rule and in consultation with the applicable primary 
                financial regulatory agencies, as an eligible asset for 
                purposes of such class.
            (8) Eligible asset class.--The term ``eligible asset 
        class'' means--
                    (A) a residential mortgage asset class;
                    (B) a commercial mortgage asset class;
                    (C) a public sector asset class;
                    (D) a small business asset class; or
                    (E) any other eligible asset class, as determined 
                by the covered bond regulator by rule and in 
                consultation with the applicable primary financial 
                regulatory agencies.
            (9) Eligible issuer.--The term ``eligible issuer'' means--
                    (A) any insured depository institution and any 
                subsidiary of such institution;
                    (B) any bank holding company and any savings and 
                loan holding company;
                    (C) any nonbank financial company that is approved 
                as an eligible issuer by the primary financial 
                regulatory agency for the nonbank financial company and 
                the covered bond regulator; and
                    (D) any issuer that is sponsored by 1 or more 
                eligible issuers for the sole purpose of issuing 
                covered bonds on a pooled basis.
            (10) Nonbank financial company.--The term ``nonbank 
        financial company'' has the meaning given such term under 
        section 102(a)(4) of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act.
            (11) Oversight program.--The term ``oversight program'' 
        means the covered bond regulatory oversight program established 
        under section 3(a).
            (12) Primary financial regulatory agency.--The term 
        ``primary financial regulatory agency'' has the meaning give 
        such term under section 2(12) of the Dodd-Frank Wall Street 
        Reform and Consumer Protection Act.
            (13) Substitute asset.--The term ``substitute asset'' 
        means--
                    (A) cash;
                    (B) any direct obligation of the United States 
                Government, and any security or other obligation, the 
                full principal and interest of which are insured or 
                guaranteed by the full faith and credit of the United 
                States Government;
                    (C) any direct obligation of a United States 
                Government corporation or Government-sponsored 
                enterprise of the highest credit quality, and any other 
                security or other obligation of the highest credit 
                quality whose full principal and interest are insured 
                or guaranteed by any such corporation or enterprise, 
                except that the outstanding principal amount of these 
                obligations in any cover pool may not exceed an amount 
                equal to 20 percent of the outstanding principal amount 
                of all assets in the cover pool without the approval of 
                the covered bond regulator;
                    (D) any overnight investment in Federal funds;
                    (E) any other substitute asset, as determined by 
                the covered bond regulator by rule and in consultation 
                with the applicable primary financial regulatory 
                agencies; and
                    (F) any deposit account or securities account into 
                which only an asset described in subparagraphs (A), 
                (B), (C), (D), or (E) may be deposited or credited.

SEC. 3. REGULATORY OVERSIGHT OF COVERED BOND PROGRAMS ESTABLISHED.

    (a) Establishment.--
            (1) In general.--Not later than 180 days after the date of 
        the enactment of this Act, the covered bond regulator shall, by 
        rule and in consultation with the applicable primary financial 
        regulatory agencies, establish a covered bond regulatory 
        oversight program that provides for--
                    (A) covered bond programs to be evaluated according 
                to reasonable and objective standards in order to be 
                approved under paragraph (2), including eligibility 
                standards for eligible assets;
                    (B) covered bond programs to be maintained in a 
                manner consistent with this Act and safe and sound 
                financial practices; and
                    (C) any estate created under section 4 to be 
                administered in a manner that is consistent with 
                maximizing the value and the proceeds of the related 
                cover pool in a resolution under this Act.
            (2) Approval of each covered bond program.--
                    (A) In general.--A covered bond shall be subject to 
                this Act only if the covered bond is issued by an 
                eligible issuer under a covered bond program that is 
                approved by the covered bond regulator.
                    (B) Existing covered bond programs.--The covered 
                bond regulator may approve a covered bond program that 
                is in existence on the date of enactment of this Act. 
                Upon such approval, each covered bond under the covered 
                bond program shall be subject to this Act, regardless 
                of when the covered bonds were issued.
                    (C) Consultation with any primary regulator.--
                Before approving any covered bond program of any 
                eligible issuer, the covered bond regulator shall 
                consult with the primary financial regulatory agency, 
                if any, of the eligible issuer and shall confirm with 
                such agency, if any, that the covered bond program is 
                consistent with safe and sound financial practices.
                    (D) Multiple covered bond programs permitted.--An 
                eligible issuer may have more than 1 covered bond 
                program.
            (3) Registry.--Under the oversight program, the covered 
        bond regulator shall maintain a registry on a Web site 
        available to the public that contains--
                    (A) the name of each approved covered bond program; 
                and
                    (B) information on all outstanding covered bonds 
                issued under each approved covered bond program, 
                (including the reports described under paragraphs (3) 
                and (4) of subsection (b).
            (4) Fees.--The covered bond regulator may levy fees on the 
        issuers of covered bonds in an amount the covered bond 
        regulator determines is necessary or appropriate to defray, in 
        the aggregate, the costs of the covered bond regulator in 
        carrying out the provisions of this Act.
    (b) Minimum Over-Collateralization Requirements.--
            (1) Requirements established.--
                    (A) In general.--The covered bond regulator, from 
                time to time, shall establish minimum over-
                collateralization requirements for covered bonds backed 
                by each of the eligible asset classes, which are 
                designed to ensure that sufficient assets exist in the 
                cover pool to satisfy all principal and interest due on 
                the covered bonds and which are based on the credit, 
                collection, and interest rate risks (excluding the 
                liquidity risks) associated with the eligible asset 
                class.
                    (B) Reliance on other over-collateralization 
                standards.--In establishing requirements under 
                subparagraph (A), the covered bond regulator may rely 
                on over-collateralization levels required for the same 
                or similar asset classes by--
                            (i) any Federal reserve bank when extending 
                        credit to depository institutions under the 
                        Federal Reserve Act (12 U.S.C. 221 et seq.);
                            (ii) any Federal home loan bank when 
                        extending credit to member institutions under 
                        the Federal Home Loan Bank Act (12 U.S.C. 1421 
                        et seq.); or
                            (iii) any other comparable lenders in 
                        substantially similar transactions.
            (2) Asset coverage test.--The eligible assets and the 
        substitute assets in each cover pool that secures covered bonds 
        shall, in the aggregate, at all times, meet the applicable 
        minimum over-collateralization requirements established under 
        paragraph (1).
            (3) Monthly reporting.--Every month, each issuer of covered 
        bonds shall submit a report on whether the cover pool that 
        secures the covered bonds meets the applicable minimum over-
        collateralization requirements established under paragraph (1) 
        to--
                    (A) the primary financial regulatory agency of the 
                issuer, if any;
                    (B) the covered bond regulator; and
                    (C) the applicable covered bondholders.
            (4) Independent asset monitor.--
                    (A) Appointment of independent asset monitor.--Each 
                issuer of covered bonds shall appoint the indenture 
                trustee for the covered bonds, or another unaffiliated 
                entity, as an independent asset monitor for the 
                applicable cover pool.
                    (B) Duties.--The independent asset monitor 
                appointed under subparagraph (A) shall, on a semiannual 
                or other more frequent periodic basis determined by the 
                covered bond regulator--
                            (i) verify whether the cover pool that 
                        secures the covered bonds meets the applicable 
                        minimum over-collateralization requirements 
                        established under paragraph (1); and
                            (ii) disclose to the primary financial 
                        regulatory agency of the issuer, if any, the 
                        covered bond regulator, and the applicable 
                        covered bond holders whether the cover pool 
                        that secures the covered bonds meets the 
                        applicable minimum over-collateralization 
                        requirements established under paragraph (1).
            (5) No loss of status.--Covered bonds shall remain subject 
        to this Act regardless of whether the applicable cover pool 
        ceases to meet the applicable minimum over-collateralization 
        requirements established under paragraph (1) at any time after 
        the covered bonds are issued.
            (6) Failure to meet requirements.--If a cover pool securing 
        covered bonds fails to meet the applicable minimum over-
        collateralization requirements established under paragraph (1), 
        and if such failure is not cured within the time specified in 
        the transaction documents related to the covered bonds--
                    (A) such failure shall be deemed to be an uncured 
                default for purposes of section 4(a); and
                    (B) the issuer shall notify the covered bond 
                regulator of such failure.
    (c) Requirements for Eligible Assets.--
            (1) Loans.--A loan shall not qualify as an eligible asset 
        for so long as the loan is delinquent for more than 60 
        consecutive days.
            (2) Securities.--A security shall not qualify as an 
        eligible asset for so long as the security does not meet any 
        credit-quality requirement under this Act.
            (3) No double pledge.--An asset shall not qualify as an 
        eligible asset for so long as the asset is subject to a prior 
        perfected security interest that has been granted in an 
        unrelated transaction. Nothing in this Act shall affect such a 
        prior perfected security interest.
            (4) Single eligible asset class.--No cover pool may include 
        eligible assets from more than 1 eligible asset class.
    (d) Other Requirements.--
            (1) Books and records of issuer.--Each issuer of covered 
        bonds shall clearly mark its books and records to identify the 
        assets that comprise the cover pool that secures the covered 
        bonds.
            (2) Schedule of eligible assets and substitute assets.--
        Each issuer of covered bonds shall deliver to the indenture 
        trustee for the covered bonds, on at least a monthly basis, a 
        schedule of all eligible assets and substitute assets in the 
        cover pool that secures the covered bonds.

SEC. 4. RESOLUTION UPON DEFAULT OR INSOLVENCY.

    (a) Uncured Default.--In this section, the term ``uncured 
default'', when used with respect to a covered bond, means a default on 
the covered bond that has not been cured within the time, if any, 
required by the transaction documents related to the covered bond.
    (b) Default on Covered Bonds Prior to Conservatorship, 
Receivership, Liquidation, or Bankruptcy.--
            (1) Creation of separate estate.--If an uncured default 
        occurs with respect to a covered bond before the issuer of such 
        covered bond enters conservatorship, receivership, liquidation, 
        or bankruptcy, an estate shall be automatically created by 
        operation of law and shall exist and be administered separate 
        and apart from the issuer or any subsequent conservatorship, 
        receivership, liquidating agency, or estate in bankruptcy for 
        the issuer or any other assets of the issuer. A separate estate 
        shall be created for each affected covered bond program.
            (2) Assets and liabilities of estate.--Any estate created 
        under paragraph (1) shall be comprised of the cover pool that 
        secures the covered bond, which shall be automatically released 
        to and held by the estate free and clear of any right, title, 
        interest, or claim of the issuer or any conservator, receiver, 
        liquidating agent, or trustee in bankruptcy for the issuer or 
        any other assets of the issuer. The estate created under 
        paragraph (1) shall be fully liable on the covered bond and all 
        other covered bonds and related obligations of the issuer 
        (including obligations under related derivative transactions) 
        that are secured by the cover pool. The estate shall not be 
        liable on any obligation of the issuer that is not secured by 
        the cover pool.
            (3) Retention of claims.--Any holder of a covered bond or 
        related obligation secured by a cover pool for which an estate 
        has been created under paragraph (1) shall retain a claim 
        against the issuer for any deficiency with respect to the 
        covered bond or related obligation.
            (4) Residual interest.--
                    (A) Issuance of residual interest.--Upon the 
                creation of an estate under paragraph (1), a residual 
                interest in the estate shall be automatically issued by 
                operation of law to the issuer.
                    (B) Nature of residual interest.--The residual 
                interest under subparagraph (A) shall--
                            (i) be an exempted security as described in 
                        section 5;
                            (ii) represent the right to any surplus 
                        from the cover pool after the covered bonds and 
                        all other liabilities of the estate have been 
                        paid in full; and
                            (iii) be evidenced by a certificate 
                        executed by the trustee of the estate.
            (5) Obligation of issuer.--After the creation of an estate 
        under paragraph (1), the issuer shall--
                    (A) transfer to the covered bond regulator, or a 
                designee of the covered bond regulator, all tangible or 
                electronic books, records, files, and other documents 
                or materials relating to the assets and liabilities of 
                the estate; and
                    (B) at the election of the covered bond regulator, 
                continue servicing the cover pool for 120 days after 
                the creation of the estate in return for a fair-market-
                value fee, as determined by the covered bond regulator, 
                that shall be payable from the estate as an 
                administrative expense.
    (c) Default on Covered Bonds Upon Conservatorship, Receivership, 
Liquidation, or Bankruptcy.--
            (1) Corporation conservatorship or receivership.--
                    (A) In general.--If the Corporation is appointed as 
                conservator or receiver for an issuer of covered bonds 
                before an uncured default results in the creation of an 
                estate under subsection (b), the Corporation as 
                conservator or receiver shall have an exclusive right, 
                during the 180-day period beginning on the date of the 
                appointment, to transfer any cover pool owned by the 
                issuer in its entirety, together with all covered bonds 
                and related obligations secured by the cover pool, to 
                another eligible issuer that meets all conditions and 
                requirements specified in the transaction documents 
                related to the covered bonds.
                    (B) Obligations during 180-day period.--During the 
                180-day period described in subparagraph (A), the 
                Corporation as conservator or receiver shall satisfy 
                all monetary and nonmonetary obligations of the issuer 
                under the covered bonds and the related transaction 
                documents until the earlier of--
                            (i) the transfer of the covered bond 
                        program to another eligible issuer;
                            (ii) the repudiation of further performance 
                        by the Corporation as conservator or receiver 
                        under the covered bond program; or
                            (iii) the failure of the Corporation as 
                        conservator or receiver to timely cure a 
                        default (other than the issuer's 
                        conservatorship or receivership) under the 
                        covered bond program.
                    (C) Assumption by transferee.--If the Corporation 
                as conservator or receiver effects a transfer described 
                in subparagraph (A) within the 180-day period described 
                in subparagraph (A), the transferee shall take 
                ownership of the cover pool and shall become fully 
                liable on all covered bonds and related obligations of 
                the issuer that are secured by the cover pool.
            (2) Other circumstances.--An estate shall be automatically 
        created by operation of law and shall exist and be administered 
        separate and apart from an issuer of covered bonds and the 
        conservatorship, receivership, liquidating agency, or estate in 
        bankruptcy for the issuer or any other assets of the issuer, 
        if--
                    (A) a conservator, receiver, liquidating agent, or 
                trustee in bankruptcy, other than the Corporation, is 
                appointed for the issuer before an uncured default 
                results in the creation of an estate under subsection 
                (b); or
                    (B) in the case of the appointment of the 
                Corporation as conservator or receiver as described in 
                paragraph (1)(A), the Corporation as conservator or 
                receiver--
                            (i) does not complete the transfer of the 
                        related covered bond program to another 
                        eligible issuer within the 180-period described 
                        in paragraph (1)(A);
                            (ii) repudiates the Corporation's further 
                        performance under the related covered bond 
                        program; or
                            (iii) fails to timely cure a default (other 
                        than the issuer's conservatorship or 
                        receivership) under the related covered bond 
                        program.
                A separate estate shall be created for each affected 
                covered bond program.
            (3) Assets and liabilities of estate.--Any estate created 
        under paragraph (2) shall be comprised of the cover pool that 
        secures the covered bonds, which shall be automatically 
        released to and held by the estate free and clear of any right, 
        title, interest, or claim of the issuer or any conservator, 
        receiver, liquidating agent, or trustee in bankruptcy for the 
        issuer or any other assets of the issuer. The estate created 
        under paragraph (2) shall be fully liable on the covered bonds 
        and all other covered bonds and related obligations of the 
        issuer (including obligations under related derivative 
        transactions) that are secured by the cover pool. The estate 
        shall not be liable on any obligation of the issuer that is not 
        secured by the cover pool.
            (4) Contingent claim.--Any contingent claim for a 
        deficiency with respect to a covered bond or related obligation 
        for which an estate has been created under paragraph (2) shall 
        be estimated by the conservator, receiver, liquidating agent, 
        or bankruptcy court for purposes of allowing the claim as a 
        provable claim if awaiting the fixing of that contingent claim 
        would unduly delay the resolution of the conservatorship, 
        receivership, liquidating agency, or bankruptcy case.
            (5) Residual interest.--
                    (A) Issuance of residual interest.--Upon the 
                creation of an estate under paragraph (2), and 
                regardless of whether any contingent claim described in 
                paragraph (4) becomes fixed or is estimated, a residual 
                interest in the estate shall be automatically issued by 
                operation of law to the conservator, receiver, 
                liquidating agent, or trustee in bankruptcy for the 
                issuer.
                    (B) Nature of residual interest.--The residual 
                interest under subparagraph (A) shall--
                            (i) be an exempted security as described in 
                        section 5;
                            (ii) represent the right to any surplus 
                        from the cover pool after the covered bonds and 
                        all other liabilities of the estate have been 
                        paid in full; and
                            (iii) be evidenced by a certificate 
                        executed by the trustee of the estate.
            (6) Obligation of issuer.--After the creation of an estate 
        under paragraph (2), the issuer and its conservator, receiver, 
        liquidating agent, or trustee in bankruptcy shall--
                    (A) transfer to the covered bond regulator, or a 
                designee of the covered bond regulator, all tangible or 
                electronic books, records, files, and other documents 
                or materials relating to the assets and liabilities of 
                the estate; and
                    (B) at the election of the covered bond regulator 
                (but subject to and not withstanding any right of 
                repudiation or rejection held by the conservator, 
                receiver, liquidating agent, or trustee in bankruptcy), 
                continue servicing the cover pool for 120 days after 
                the creation of the estate in return for a fair-market-
                value fee, as determined by the covered bond regulator, 
                that shall be payable from the estate as an 
                administrative expense.
    (d) Administration and Resolution of Estates.--
            (1) Trustee, servicer, and administrator.--
                    (A) In general.--The covered bond regulator shall--
                            (i) act as or appoint the trustee of any 
                        estate created under subsection (b)(1) or 
                        (c)(2); and
                            (ii) appoint 1 or more servicers or 
                        administrators for the cover pool held by the 
                        estate.
                    (B) Powers and duties of servicer or 
                administrator.--Any servicer or administrator appointed 
                for an estate--
                            (i) shall--
                                    (I) collect, realize on (by 
                                liquidation or other means), and 
                                otherwise manage the cover pool held by 
                                the estate; and
                                    (II) invest and use the proceeds 
                                and funds received to make all 
                                remaining interest and principal 
                                payments on the applicable covered 
                                bonds according to their terms (or, if 
                                an acceleration or similar event occurs 
                                under the related transaction 
                                documents, at the times specified in 
                                the transaction documents) and to 
                                satisfy any other liabilities of the 
                                estate; and
                            (ii) may borrow or otherwise procure funds 
                        for the benefit of the estate on a secured or 
                        unsecured basis and on a priority, pari passu, 
                        or subordinated basis.
                    (C) Supervision of servicer or administrator by the 
                covered bond regulator.--
                            (i) In general.--The covered bond regulator 
                        shall supervise any servicer or administrator 
                        that is appointed for an estate created under 
                        subsection (b)(1) or (c)(2).
                            (ii) Removal and replacement.--If the 
                        covered bond regulator determines that it is in 
                        the best interests of an estate, the covered 
                        bond regulator may remove or replace any 
                        servicer or administrator for the estate.
                            (iii) Reports.--Each servicer or 
                        administrator for an estate shall, at such 
                        times and in such manner as the covered bond 
                        regulator shall require, submit to the covered 
                        bond regulator, the owner of the residual 
                        interest, and any other person designated by 
                        the covered bond regulator, reports that 
                        describe the activities of the servicer or 
                        administrator on behalf of the estate and the 
                        performance of the cover pool held by the 
                        estate.
                            (iv) Fees and expenses.--All fees and 
                        expenses of a servicer or administrator for an 
                        estate shall be approved by the covered bond 
                        regulator and shall be paid from the estate as 
                        an administrative expense.
                    (D) Judicial or administrative actions.--Any 
                servicer or administrator appointed for an estate may 
                commence or continue judicial or administrative 
                actions, in its own name on behalf of the estate, for 
                the purpose of collecting, realizing on, or otherwise 
                managing the cover pool held by the estate or 
                exercising its other powers or duties on behalf of the 
                estate. No covered bondholder, indenture trustee, or 
                other person to whom an estate is or is alleged to be 
                liable may commence or continue any judicial or 
                administrative action against the estate, the trustee, 
                or any servicer or administrator, except for an action 
                to compel the release of funds that are available to 
                the estate, that are permitted to be distributed under 
                this Act and regulations promulgated by the covered 
                bond regulator, and that are permitted and required to 
                be distributed under the related transaction documents 
                and any contracts executed by or on behalf of the 
                estate after its creation under this Act. No court may 
                issue an attachment or execution on the assets of an 
                estate. Except at the request of the covered bond 
                regulator or as otherwise provided in this 
                subparagraph, no court may take any action to restrain 
                or affect the resolution of an estate under this Act. 
                The covered bond regulator shall be entitled to 
                sovereign immunity in carrying out the provisions of 
                this Act.
                    (E) Closing of estate.--After an estate has been 
                fully administered, the covered bond regulator shall 
                close the estate and, to the extent determined 
                appropriate by the covered bond regulator, may retain 
                or destroy records of the estate.
            (2) Study on liquidity advances.--The Board of Governors 
        shall conduct a study on whether Federal reserve banks should 
        be empowered to make advances to an estate created under 
        subsection (b)(1) or (c)(2) solely for the purpose of providing 
        liquidity in the case of timing mismatches among the assets and 
        the liabilities of the estate. The Board of Governors shall 
        submit a report to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial Services 
        of the House of Representatives on the results of such study 
        not later than 180 days after the date of enactment of this 
        Act.

SEC. 5. SECURITIES LAW PROVISIONS.

    (a) Covered Bonds Issued or Guaranteed by Banks.--Any covered bond 
issued or guaranteed by a bank is a security issued or guaranteed by a 
bank under Section 3(a)(2) of the Securities Act of 1933, Section 
3(c)(3) of the Investment Company Act of 1940, and Section 304(a)(4)(A) 
of the Trust Indenture Act of 1939. No covered bond issued or 
guaranteed by a bank is an asset-backed security, as defined in section 
3 of the Securities and Exchange Act of 1934 (15 U.S.C. 78c).
    (b) Exemptions for Estates and Residual Interests.--Any estate that 
is or may be created under subsection (b) or (c) of section 4 shall be 
exempt from all securities laws but shall be subject to the reporting 
requirements established by the covered bond regulator under subsection 
(d)(1)(C)(iii) of section 4 and shall succeed to any requirement of the 
issuer to file such periodic information, documents, and reports in 
respect of the covered bonds as specified in section 13(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m(a)) and any other rule 
established by Federal Government banking agencies. Any residual 
interest in an estate that is or may be created under subsection (b) or 
(c) of section 4 shall be exempt from all securities laws.

SEC. 6. MISCELLANEOUS PROVISIONS.

    (a) Domestic Securities.--Section 106(a)(1) of the Secondary 
Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1(a)(1)) is 
amended--
            (1) in subparagraph (C), by striking ``or'' at the end;
            (2) in subparagraph (D), by adding ``or'' at the end; and
            (3) by inserting after subparagraph (D) the following:
                    ``(E) covered bonds (as defined under section 2(3) 
                of the United States Covered Bond Act of 2010),''.
    (b) No Conflict.--The provisions of this Act shall apply, 
notwithstanding any provision of the Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.), title 11, United States Code, or any other 
provision of Federal law with respect to conservatorship, receivership, 
liquidation, or bankruptcy. No provision of the Federal Deposit 
Insurance Act (12 U.S.C. 1811 et seq.), title 11, United States Code, 
or any other provision of Federal law with respect to conservatorship, 
receivership, liquidation, or bankruptcy may be construed or applied in 
a manner that defeats or interferes with the purpose or operation of 
this Act.
                                 <all>
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