The Capital Markets & Government Sponsored Enterprises subcommittee of the House Financial Services Committee will hold a mark-up of the United States Covered Bond Act of 2011 on 3 May, following a hearing in March of the proposed legislation.

The bill, proposed by Republican Scott Garrett, who chairs the subcommittee, and co-sponsored by Democrat Carolyn Maloney, was introduced on 8 March ahead of a hearing on 11 March.

That hearing revealed concerns about potential covered bond legislation among the Federal Deposit Insurance Corporation and some community bankers, with the Federal Home Loan Banks seen as possibly joining those objecting to moves to create a legislative framework.

However, proponents of covered bonds in the US are optimistic about the bill moving forward in the legislative process, with GSE reform helping to put them on the agenda. One banker suggested that a reference by Standard & Poor’s to the impact of GSE debt on the creditworthiness of the US when lowering its outlook on the country’s triple-A rating to negative on Monday only highlighted the need for politicians to come up with alternative means of financing mortgages.