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Subject: Covered Bonds
Date: October 20, 2008
To: Chief Executive Officers of National Banks, Department and Division Heads, Examining Personnel, and Other Interested Parties
Description: Issuances of U.S. Covered Bonds by National Banks
On July 28, 2008, the Federal Deposit Insurance Corporation (FDIC) published the attached final policy statement (policy statement) clarifying how the FDIC will treat certain covered bonds in a receivership or conservatorship involving the issuing insured depository institution. The policy statement provides for expedited access to pledged covered bond collateral if the covered bond issuance involves eligible mortgages and meets the policy statement's criteria. To qualify for expedited access, the covered bond issuances must be made with the consent of an institution's primary federal regulator. The Office of the Comptroller of the Currency (OCC) is issuing this bulletin to describe how national banks are to satisfy this requirement in the policy statement.
National banks that propose to issue covered bonds pursuant to the FDIC policy statement are instructed to notify their examiner-in-charge (EIC) and receive the OCC's no-objection prior to commencing a covered bond program. National banks must provide their EIC with information on how their proposed program complies with the FDIC policy statement. The OCC will review proposed programs under its supervisory no-objection process, as part of its ongoing supervisory role. The OCC will address the consent component of the FDIC policy statement through a written supervisory no-objection to a bank's proposed covered bond program.
For additional information, contact the Credit and Market Risk Division at (202) 874-4660.
Timothy W. Long