Still Hope for Covered Bonds in U.S. Financial Reform Bill?

An article by Albert Bozzo at CNBC.com cites "some speculation" to the effect that covered bond (CB) legislation could still end up forming part of Congress' big financial reform bill.

As Bozzo notes (May 25), CB legislation did not make its way either into the version of financial reform passed by the House of Representatives or its counterpart in the Senate. Before the financial reform measure can become law, a compromise version must be hammered out in a House-Senate conference committee as part of the reconciliation process.

The speculation cited is that the conference committee might decide to include covered bonds in the compromise version.

Bozzo writes that Rep. Scott Garrett (R-NJ) — covered bonds' major proponent in Congress — "could" become a member of the conference committee.  (Reportedly, some lawmakers sympathetic to covered bonds already have been appointed.)  And he quotes Rep. Garrett as saying "We're certainly going to push" covered bonds. 

But beyond that, the article does not offer any indication that hopes for including covered bonds in the financial reform package have a reasonable likelihood of finding success at this late stage.

There is no requirement that a specific provision in a conference committee compromise must have been present in the version originally passed by either the House or Senate.  The late President Ronald Reagan reportedly once quipped: "If an orange and an apple went into conference consultations, it might come out a pear."