Republican Congressman Scott Garrett plans to tackle covered bond legislation again this Congress, and aims to reintroduce a covered bond bill in the House of Representatives in the near future, according to a spokesperson in his Washington office.

Republican Congressman Scott Garrett

The 113th US Congress commenced on 3 January and, as is the case when a new Congress convenes, any legislation (with the exception of treaties) being considered under the previous one has expired and must be re-introduced.

Garrett, a Republican member of the House of Representatives and chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, has led efforts to introduce covered bond legislation in the US. The United States Covered Bond Act of 2011 (HR 940), a bill that was sponsored by Garrett and Democrat Carolyn Maloney, was passed by the House Financial Services Committee (HFSC) in June 2011, but did not make it on the floor of House of Representatives in the last Congress.

However, Garrett has set his sights on tackling covered bond legislation again this Congress.

“As our country recovers from the fallout of the financial crisis, it’s more important now than ever before to provide the US capital markets with new and innovative ways to unlock credit and encourage private sector capital to get off the sidelines,” said Garrett in a statement. “With the federal government backing over 90% of the mortgage market, we must seek creative ways to enable the private sector to provide additional mortgage, consumer, commercial, and other types of credit.

“I look forward to working with my colleagues in the House and Senate to ensure we pass covered bond legislation in the 113th Congress.”

Garrett is aiming to refile covered bond legislation in the near future, according to his Washington office.

Proponents of establishing a US covered bond market via legislation are taking heart from Garrett’s continued membership of Congress and his position as chairman of the House Financial Services Subcommittee on Capital Markets and GSEs, as well as other developments such as the introduction of covered bond legislation in Canada, the resolution of tax issues related to HR 940 within the Ways & Means Committee, and the release of a final rule on qualified mortgages by the Consumer Financial Protection Bureau (CFPB) on Thursday.

“Garrett is still in Congress and there is a lot of energy around covered bond legislation,” said a lawyer.