LIBOR Bill Introduced in Senate; Could Pass This Month
March 7, 2022
Bipartisan legislation was introduced in the Senate last week to help effect a fair transition for financial contracts which do not consider the permanent cessation of LIBOR and have no workable fallbacks (so-called “tough legacy” contracts). The bill will minimize the risk of litigation and adverse economic impacts associated with the transition and provide greater certainty to investors, businesses, and consumers.
The legislation could pass the Senate as early as this month as part of the omnibus appropriations bill that is working its way through Congress. CREFC and 22 other financial trade associations wrote Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) to endorse the legislation.
Fed Chair Powell said that the legislation is important and that the transition is down to the “hard tail.” The bill was introduced by Senators Jon Tester (D-MT), Thom Tillis (R-NC), and Senate Banking Committee Chairman Sherrod Brown (D-OH) and Ranking Member Pat Toomey (R-PA).
The House passed similar ‘tough legacy LIBOR’ legislation in late 2021 in a bill sponsored by Rep. Brad Sherman (D-CA-30).