The CRE Finance Council has sent a letter urging support for HR 5823, "The United States Covered Bond Act of 2010," which will be considered today by the House Financial Services Committee. The Council applauds the bill's sponsors, Reps. Scott Garrett (R-NJ), Paul Kanjorksi (D-PA) and Spencer Bachus (R-AL), for their efforts to provide a statutory framework that would create a covered bond market in the United States. Significantly, HR 5823, as it will be considered by the Committee, includes high-quality commercial mortgages and commercial mortgage-backed securities (CMBS) as eligible collateral in the newly created framework. The CRE Finance Council supports a U.S. covered bond market in order to promote private commercial real estate lending and investing. In this regard, the Council believes that covered bonds would provide a new and diverse funding mechanism that could offer additional sources of capital and liquidity. Additionally, HR 5823 would level the playing field with Europe, which already has a covered bond market that includes commercial mortgages and CMBS to better serve consumers and businesses seeking access to credit. "The CRE Finance Council strongly supports efforts to facilitate a U.S. covered bond market as an additive financing tool to promote commercial real estate lending and investing," said Lisa Pendergast, president, CRE Finance Council. "Covered bonds should not and cannot replace CMBS as a capital source for commercial mortgages, but these instruments could provide another source of liquidity to help provide much needed capital to fund commercial real estate." CRE Finance Council testified on Covered Bonds before the House Financial Services Committee in December 2009 and, in its testimony, said there is no single solution to revive commercial real estate and overall credit markets. The Council emphasized that it is critical that policymakers consider various measures that will help revive our economy, including additional sources of capital. For additional background, please find CRE Finance Council's "Framework for a Commercial Real Estate Recovery," where the Council outlined its positions on Covered Bonds. For more information, visit www.crefc.org.