Bill > S3844

This bill establishes a clear and uniform process for replacing the London interbank offered rate (LIBOR) in existing contracts that do not provide for the use of a clearly defined or practicable replacement benchmark rate. The key provisions of the bill include: - Designating the Board of Governors of the Federal Reserve System (the Board) to select a replacement benchmark, based on the Secured Overnight Financing Rate (SOFR), to be used in LIBOR contracts that lack fallback provisions or do not specify a replacement benchmark. - Allowing determining persons to select the Board-selected benchmark replacement as the replacement, and providing that the Board-selected benchmark replacement and any necessary conforming changes will become an integral part of the LIBOR contract. - Providing a safe harbor from legal claims related to the selection and use of the Board-selected benchmark replacement. - Clarifying that the transition from LIBOR to the replacement benchmark will not be treated as a taxable event. - Allowing banks to use any appropriate benchmark, not just SOFR, for non-LIBOR loans, and prohibiting federal supervisory agencies from taking adverse action solely because the benchmark is not SOFR. - Preempting state and local laws that would limit the manner of calculating interest or the selection of a replacement benchmark. The bill aims to facilitate a smooth and uniform transition away from LIBOR, which is widely used in contracts worldwide, in order to avoid disruption and litigation related to the discontinuation of LIBOR.

Budget and Finance

https://www.congress.gov/bill/117th-congress/senate-bill/3844/all-info