Rep. Scott Garrett (R-N.J.) introduced H.R. 940, the United States Covered Bond Act of 2011 into Congress on Tuesday. It marks the third time in as many years the representative hopes to establish a clear regulatory framework for the structured finance product. The representative's office told HousingWire in February the bill would be introduced soon. Supporters say plans to shrink the government-sponsored enterprises of Fannie Mae and Freddie Mac leave the market open to the type of change covered bonds may bring. Covered bonds are well established in Europe, and Garrett is looking to expand the product outside its traditional asset classes of mortgages and corporate performance. Under his plan, covered bonds would be expanded beyond mortgages and able to privately fund student loans or car purchases, for example. This time may be different, given the powerful positions the two main sponsors hold in Congress. Garrett is chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises. Co-sponsor Rep. Carolyn Maloney (D-N.Y.), is ranking member of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. "This legislation will provide the necessary framework for a covered bond market in the U.S. to flourish and grow, while ensuring that U.S. financial institutions are no longer at a competitive disadvantage to their foreign counterparts," Garrett said. There are covered bonds originated in the United States, but not to the extent seen oversees. In Germany, most mortgages are financed via covered bonds. France also recently eased restrictions on its covered bonds. Success here, however, hinges on a solid legislative framework. With this legal certainty, the argument goes, investors will gain confidence against losses. In a covered bond, the asset remains on the balance sheet of the issuer. The issuer is also on the hook to cover potential losses -- the greatest draw of a covered bond. "In the wake of the financial crisis, we need new investment vehicles that will attract investors to the securities market and increase the flow of credit," Maloney said. "With their success in Europe, covered bonds present a significant opportunity for U.S. financial markets and I look forward to working to ensure their success in this country." Write to Jacob Gaffney. Follow him on Twitter @JacobGaffney.