without the approval of the covered bond regu-
lator; 
(D) any overnight investment in Federal 
funds; 
(E) any other substitute asset, as deter-
mined by the covered bond regulator by rule 
and in consultation with the applicable primary 
financial regulatory agencies; and 
(F) any deposit account or securities ac-
count into which only an asset described in sub-
paragraphs (A), (B), (C), (D), or (E) may be 
deposited or credited. 
SEC. 3. REGULATORY OVERSIGHT OF COVERED BOND PRO-
GRAMS ESTABLISHED. 
(a) ESTABLISHMENT.— 
(1) IN
GENERAL.—Not later than 180 days 
after the date of the enactment of this Act, the cov-
ered bond regulator shall, by rule and in consulta-
tion with the applicable primary financial regulatory 
agencies, establish a covered bond regulatory over-
sight 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; 
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(B) covered bond programs to be main-
tained 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 PRO-
GRAM.— 
(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
PRO-
GRAMS.—The covered bond regulator may ap-
prove a covered bond program that is in exist-
ence 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 
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bond program of any eligible issuer, the covered 
bond regulator shall consult with the primary 
financial regulatory agency, if any, of the eligi-
ble issuer and shall confirm with such agency, 
if any, that the covered bond program is con-
sistent 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. 
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(b) MINIMUM OVER-COLLATERALIZATION REQUIRE-
MENTS.— 
(1) REQUIREMENTS ESTABLISHED.— 
(A) IN GENERAL.—The covered bond regu-
lator, from time to time, shall establish min-
imum 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 sat-
isfy all principal and interest due on the cov-
ered 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 estab-
lishing 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 ex-
tending credit to depository institutions 
under the Federal Reserve Act (12 U.S.C. 
221 et seq.); 
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(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 as-
sets 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 agen-
cy 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 
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shall appoint the indenture trustee for the cov-
ered bonds, or another unaffiliated entity, as an 
independent asset monitor for the applicable 
cover pool. 
(B) DUTIES.—The independent asset mon-
itor appointed under subparagraph (A) shall, on 
a semiannual or other more frequent periodic 
basis determined by the covered bond regu-
lator— 
(i) verify whether the cover pool that 
secures the covered bonds meets the appli-
cable minimum over-collateralization re-
quirements 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-collateraliza-
tion requirements established under para-
graph (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 
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