SRC-AAA S.B. 1618 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1618
By: Duncan
Finance
4-13-97
As Filed


DIGEST 

Currently, collateralized mortgage obligations are not on the list of
permissible collateral held by financial institutions.  Many financial
institutions hold collateralized mortgage obligations with a stated final
maturity of greater than 10 years in their portfolios. S.B. 1618 adds
collateralized mortgage obligations to the list of permissible collateral
held by financial institutions. 

PURPOSE

As proposed, S.B. 1618 adds collateralized mortgage obligations to the
list of permissible collateral held by financial institutions. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 2257.002(5), Government Code, by adding
Paragraph (D), to provide that a collaterized mortgage obligated is one
that has an expected weighted average life of ten years or less and which
does not constitute a "higher risk mortgage security."  Defines "high risk
mortgage security." 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.