Brought to us courtesy of senators Kay Hagan of North Carolina and one of the banking lobby’s most obedient lap dogs, Bob Corker of Tennessee.
The United States Covered Bond Act of 2011 is designed to allow bundling of any kind of debt including derivatives, into marketable securities guaranteed at full face value by the FDIC.
Asset classes eligible to be rolled into Covered Bonds are shown below including “H” which leaves the door open for anything left over, What would qualify would be the decision of one unelected official, the treasury secretary/Goldman Sachs representative.
(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
The full text of the bill is here.
Thanks Bob Corker for working to build this new FDIC insured landfill where our TBTF banks can dump all of their unwanted financial refuse and collect 100 cents on the dollar on their way out.
Please write your congressman to stop this before it is too late.