IB 
Union Calendar No. 542 
112TH CONGRESS 
2ND SESSION 
H. R. 940 
[Report No. 112–407, Part I] 
To establish standards for covered bond programs and a covered bond 
regulatory oversight program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 8, 2011 
Mr. GARRETT (for himself and Mrs. MALONEY) introduced the following bill; 
which was referred to the Committee on Financial Services, and in addi-
tion to the Committee on Ways and Means, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
MARCH 5, 2012 
Reported from the Committee on Financial Services with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
MARCH 5, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than March 30, 2012 
MARCH 30, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than May 18, 2012 
MAY 18, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than June 29, 2012 
JUNE 29, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than September 14, 2012 
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SEPTEMBER 14, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than November 16, 2012 
NOVEMBER 16, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than November 30, 2012 
NOVEMBER 30, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than December 14, 2012 
DECEMBER 14, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than December 21, 2012 
DECEMBER 21, 2012 
Referral to the Committee on Ways and Means extended for a period ending 
no later than December 31, 2012 
DECEMBER 31, 2012 
The Committee on Ways and Means discharged; committed to the Committee 
of the Whole House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on March 8, 2011] 
A BILL 
To establish standards for covered bond programs and a 
covered bond regulatory oversight program, and for other 
purposes. 
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Be it enacted by the Senate and House of Representa-
tives 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 2011’’. 
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 asso-
ciated with 1 or more eligible assets, substitute 
assets, or other assets in a cover pool; 
(B) any credit enhancement or liquidity ar-
rangement associated with 1 or more eligible as-
sets, substitute assets, or other assets in a cover 
pool; 
(C) any guarantee, letter-of-credit right, or 
other secondary obligation that supports any 
payment or performance of 1 or more eligible as-
sets, substitute assets, or other assets in a cover 
pool; and 
(D) any proceeds of, or other property inci-
dent to, 1 or more eligible assets, substitute as-
sets, or other assets in a cover pool. 
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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 applicable covered 
bond regulator; 
(D) is identified in a register of covered 
bonds that is maintained by the Secretary; and 
(E) is not a deposit (as defined in section 
3(l) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(l))). 
(5) COVERED BOND PROGRAM.—The term ‘‘cov-
ered bond program’’ means any program of an eligi-
ble issuer under which, on the security of a single 
cover pool, 1 or more series or tranches of covered 
bonds may be issued. 
(6) COVERED
BOND
REGULATOR.—The term 
‘‘covered bond regulator’’ means— 
(A) for any eligible issuer that is subject to 
the jurisdiction of an appropriate Federal bank-
ing agency (as defined in section 3(q) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1813(q))), 
the appropriate Federal banking agency; 
(B) for any eligible issuer that is described 
in paragraph (9)(D), that is not subject to the 
jurisdiction of an appropriate Federal banking 
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agency, and that is sponsored by only 1 eligible 
issuer, the covered bond regulator for the sponsor; 
(C) for any eligible issuer that is described 
in paragraph (9)(D), that is not subject to the 
jurisdiction of an appropriate Federal banking 
agency, and that is sponsored by more than 1 el-
igible issuer, the covered bond regulator for the 
sponsor whose covered bonds constitute the larg-
est share of the cover pool of the issuer; and 
(D) for any other eligible issuer that is not 
subject to the jurisdiction of an appropriate Fed-
eral banking agency, the Secretary. 
(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 prop-
erty; 
(ii) any mortgage loan that is insured 
under the National Housing Act (12 U.S.C. 
1701 et seq.); and 
(iii) any loan that is guaranteed, in-
sured, or made under chapter 37 of title 38, 
United States Code; 
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(B) in the case of the commercial mortgage 
asset class, any commercial mortgage loan (in-
cluding any multifamily mortgage loan); 
(C) in the case of the public sector asset 
class— 
(i) any security issued by a State, mu-
nicipality, or other governmental authority; 
(ii) any loan made to a State, munici-
pality, or other governmental authority; 
and 
(iii) any loan, security, or other obli-
gation 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); 
(D) in the case of the auto asset class, any 
auto loan or lease; 
(E) in the case of the student loan asset 
class, any student loan (whether guaranteed or 
nonguaranteed); 
(F) in the case of the credit or charge card 
asset class, any extension of credit to a person 
under an open-end credit plan; 
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(G) in the case of the small business asset 
class, any loan that is made or guaranteed under 
a program of the Small Business Administra-
tion; and 
(H) in the case of any other eligible asset 
class, any asset designated by the Secretary, by 
rule and in consultation with the covered bond 
regulators, 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) an auto asset class; 
(E) a student loan asset class; 
(F) a credit or charge card asset class; 
(G) a small business asset class; and 
(H) any other eligible asset class designated 
by the Secretary, by rule and in consultation 
with the covered bond regulators. 
(9) ELIGIBLE
ISSUER.—The term ‘‘eligible 
issuer’’ means— 
(A) any insured depository institution and 
any subsidiary of such institution; 
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(B) any bank holding company, any sav-
ings and loan holding company, and any sub-
sidiary of any of such companies; 
(C) any nonbank financial company (as de-
fined in section 102(a)(4) of the Dodd-Frank 
Wall Street Reform and Consumer Protection 
Act (12 U.S.C. 5311(a)(4))) that is supervised by 
the Board of Governors of the Federal Reserve 
System under section 113 of the Dodd-Frank 
Wall Street Reform and Consumer Protection 
Act (12 U.S.C. 5323), including any inter-
mediate holding company supervised as a 
nonbank financial company, and any subsidiary 
of such a nonbank financial company; 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) OVERSIGHT
PROGRAM.—The term ‘‘over-
sight program’’ means the covered bond regulatory 
oversight program established under section 3(a). 
(11) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Department of the Treasury. 
(12) SUBSTITUTE ASSET.—The term ‘‘substitute 
asset’’ means— 
(A) cash; 
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(B) any direct obligation of the United 
States Government, and any security or other 
obligation whose full principal and interest are 
insured or guaranteed by the full faith and cred-
it of the United States Government; 
(C) any direct obligation of a United States 
Government corporation or Government-spon-
sored 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 such cor-
poration or enterprise, except that the out-
standing 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 applicable covered bond regu-
lator; 
(D) any overnight investment in Federal 
funds; 
(E) any other substitute asset designated by 
the Secretary, by rule and in consultation with 
the covered bond regulators; and 
(F) any deposit account or securities ac-
count into which only an asset described in sub-
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paragraph (A), (B), (C), (D), or (E) may be de-
posited 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 Secretary 
shall, by rule and in consultation with the covered 
bond regulators, 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), in-
cluding any additional eligibility standards for 
eligible assets and any other criteria determined 
appropriate by the Secretary to further the pur-
poses of this Act; 
(B) covered bond programs to be main-
tained in a manner that is consistent with this 
Act and safe and sound asset-liability manage-
ment and other 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 re-
lated cover pool in a resolution under this Act. 
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