[Congressional Record Volume 167, Number 212 (Wednesday, December 8, 2021)]
[House]
[Pages H7479-H7486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1130
              ADJUSTABLE INTEREST RATE (LIBOR) ACT OF 2021

  Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4616) to deem certain references to LIBOR as referring to a 
replacement benchmark rate upon the occurrence of certain events 
affecting LIBOR, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4616

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Adjustable Interest Rate 
     (LIBOR) Act of 2021''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) LIBOR is used as a benchmark rate in more than $200 
     trillion of contracts worldwide;
       (2) a significant number of existing contracts that 
     reference LIBOR do not provide for the use of a clearly 
     defined or practicable replacement benchmark rate when LIBOR 
     is discontinued; and
       (3) the cessation or non-representativeness of LIBOR could 
     result in disruptive litigation related to existing contracts 
     that do not provide for the use of a clearly defined or 
     practicable replacement benchmark rate.
       (b) Purpose.--It is the purpose of this Act--
       (1) to establish a clear and uniform process, on a 
     nationwide basis, for replacing LIBOR in existing contracts 
     the terms of which do not provide for the use of a clearly 
     defined or practicable replacement benchmark rate, without 
     affecting the ability of

[[Page H7480]]

     parties to use any appropriate benchmark rate in new 
     contracts;
       (2) to preclude litigation related to existing contracts 
     the terms of which do not provide for the use of a clearly 
     defined or practicable replacement benchmark rate; and
       (3) to allow existing contracts that reference LIBOR but 
     provide for the use of a clearly defined fallback and 
     practicable replacement rate, to operate according to their 
     terms.
       (c) Rule of Construction.--Nothing in this Act shall be 
     construed to disfavor the use of any benchmark rate on a 
     prospective basis.

     SEC. 3. DEFINITIONS.

       As used in this Act, the following terms shall have the 
     following meanings:
       (1) ``Benchmark'' shall mean an index of interest rates or 
     dividend rates that is used, in whole or in part, as the 
     basis of or as a reference for calculating or determining any 
     valuation, payment or other measurement.
       (2) ``Benchmark Administrator'' means a person that 
     publishes a Benchmark for use by third parties.
       (3) ``Benchmark Replacement'' shall mean a Benchmark, or an 
     interest rate or dividend rate (which may or may not be based 
     in whole or in part on a prior setting of LIBOR), to replace 
     LIBOR or any interest rate or dividend rate based on LIBOR, 
     whether on a temporary, permanent, or indefinite basis, under 
     or in respect of a LIBOR Contract.
       (4) ``Benchmark Replacement Conforming Changes'' shall mean 
     any technical, administrative, or operational changes, 
     alterations, or modifications that--
       (A) the Board determines, in its discretion, would address 
     one or more issues affecting the implementation, 
     administration, and calculation of the Board-Selected 
     Benchmark Replacement in LIBOR contracts; or
       (B) solely with respect to a LIBOR Contract that is not a 
     Consumer Loan, in the reasonable judgment of a Calculating 
     Person, are otherwise necessary or appropriate to permit the 
     implementation, administration, and calculation of the Board-
     Selected Benchmark Replacement under or in respect of a LIBOR 
     Contract after giving due consideration to any Benchmark 
     Replacement Conforming Changes under subparagraph (A).
       (5) ``Board'' means the Board of Governors of the Federal 
     Reserve System.
       (6)(A) ``Board-Selected Benchmark Replacement'' shall mean 
     a Benchmark Replacement identified by the Board that is based 
     on SOFR.
       (B) The Board shall adjust the Board-Selected Benchmark 
     Replacement for each category of LIBOR Contract that the 
     Board may identify to--
       (i) apply to each LIBOR tenor; and
       (ii) incorporate the relevant Tenor Spread Adjustment.
       (C) For Consumer Loans, the Board-Selected Benchmark 
     Replacement shall initially reflect the spread between the 
     Board-Selected Benchmark Replacement and LIBOR immediately 
     before the LIBOR Replacement Date and shall incorporate the 
     relevant Tenor Spread Adjustment over a one-year transition 
     period.
       (7) ``Calculating Person'' shall mean, with respect to any 
     LIBOR Contract, any person (which may be the Determining 
     Person) responsible for calculating or determining any 
     valuation, payment, or other measurement based on a 
     Benchmark.
       (8) ``Consumer Loan'' shall mean a consumer credit 
     transaction. For purposes of this paragraph, the terms 
     ``consumer'' and ``credit'' have the meaning given those 
     terms, respectively, under section 103 of the Truth in 
     Lending Act (15 U.S.C. 1602).
       (9) ``Determining Person'' shall mean, with respect to any 
     LIBOR Contract, any person with the authority, right, or 
     obligation, including on a temporary basis, (as identified by 
     the provisions of the LIBOR Contract, or as identified by the 
     governing law of the LIBOR Contract, as appropriate) to 
     determine a Benchmark Replacement.
       (10) ``Fallback Provisions'' shall mean terms in a LIBOR 
     Contract for determining a Benchmark Replacement, including 
     any terms relating to the date on which the Benchmark 
     Replacement becomes effective.
       (11) ``LIBOR'' shall mean the overnight and 1-, 3-, 6-, and 
     12-month tenors of U.S. dollar LIBOR (formerly known as the 
     London interbank offered rate) as administered by ICE 
     Benchmark Administration Limited (or any predecessor or 
     successor thereof). LIBOR shall not include the 1-week or 2-
     month tenors of U.S. dollar LIBOR.
       (12) ``LIBOR Contract'' shall mean, without limitation, any 
     contract, agreement, indenture, organizational documents, 
     guarantee, mortgage, deed of trust, lease, Security (whether 
     representing debt or equity, and including any interest in a 
     corporation, a partnership, or a limited liability company), 
     instrument, or other obligation or asset that, by its terms, 
     continues in any way to use LIBOR as a Benchmark as of the 
     applicable LIBOR Replacement Date.
       (13) ``LIBOR Replacement Date'' shall mean the first London 
     banking day after June 30, 2023, unless the Board determines 
     that any LIBOR tenor will cease to be published or cease to 
     be representative on a different date.
       (14) ``Security'' shall have the meaning assigned to such 
     term in section 2(a) of the Securities Act of 1933 (15 U.S.C. 
     77b(a)).
       (15) ``SOFR'' shall mean the Secured Overnight Financing 
     Rate published by the Federal Reserve Bank of New York (or a 
     successor administrator).
       (16) ``Tenor Spread Adjustment'' shall mean--
       (A) 0.00644 percent for overnight LIBOR;
       (B) 0.11448 percent for 1-month LIBOR;
       (C) 0.26161 percent for 3-month LIBOR;
       (D) 0.42826 percent for 6-month LIBOR; and
       (E) 0.71513 percent for 12-month LIBOR.

     SEC. 4. LIBOR CONTRACTS.

       (a) On the LIBOR Replacement Date, the Board-Selected 
     Benchmark Replacement shall, by operation of law, be the 
     Benchmark Replacement for any LIBOR Contract that, after 
     giving any effect to subsection (b)--
       (1) contains no Fallback Provisions; or
       (2) contains Fallback Provisions that identify neither--
       (A) a specific Benchmark Replacement; nor
       (B) a Determining Person.
       (b) On the LIBOR Replacement Date, any references in the 
     Fallback Provisions of a LIBOR Contract to--
       (1) a Benchmark Replacement that is based in any way on any 
     LIBOR value, except to account for the difference between 
     LIBOR and the Benchmark Replacement, or
       (2) a requirement that a person (other than a Benchmark 
     Administrator) conduct a poll, survey, or inquiries for 
     quotes or information concerning interbank lending or deposit 
     rates,
     shall be disregarded as if not included in the Fallback 
     Provisions of such LIBOR Contract and shall be deemed null 
     and void and without any force or effect.
       (c) Subject to subsection (g)(2), a Determining Person 
     shall have authority under this Act, but shall not be 
     required, to select the Board-Selected Benchmark Replacement 
     as the Benchmark Replacement.
       (d) Any selection by a Determining Person of the Board-
     Selected Benchmark Replacement pursuant to subsection (c) 
     shall be--
       (1) irrevocable;
       (2) made by the earlier of the LIBOR Replacement Date and 
     the latest date for selecting a Benchmark Replacement 
     according to the terms of such LIBOR Contract; and
       (3) used in any determinations of the Benchmark under or in 
     respect of such LIBOR Contract occurring on and after the 
     LIBOR Replacement Date.
       (e) If a Determining Person has authority to select the 
     Board-Selected Benchmark Replacement under subsection (c) but 
     does not select a Benchmark Replacement by the date specified 
     in subsection (d)(2), then, on the LIBOR Replacement Date, 
     the Board-Selected Benchmark Replacement shall, by operation 
     of law, be the Benchmark Replacement for the LIBOR Contract.
       (f) If the Board-Selected Benchmark Replacement becomes the 
     Benchmark Replacement for a LIBOR Contract pursuant to 
     subsection (a), (c), or (e) then all Benchmark Replacement 
     Conforming Changes shall become an integral part of such 
     LIBOR Contract by operation of law. For the avoidance of 
     doubt, a Calculating Person shall not be required to obtain 
     consent from any other person prior to the adoption of 
     Benchmark Replacement Conforming Changes.
       (g) The provisions of this Act shall not alter or impair--
       (1) any written agreement specifying that a LIBOR Contract 
     shall not be subject to this Act;
       (2) any LIBOR Contract that contains Fallback Provisions 
     that identify a Benchmark Replacement that is not based in 
     any way on any LIBOR value (including, but not limited to, 
     the prime rate or the Effective Federal Funds Rate), except 
     that such LIBOR Contract shall be subject to subsection (b);
       (3) any LIBOR Contract subject to subsection (c) as to 
     which a Determining Person does not elect to use a Board-
     Selected Benchmark Replacement pursuant to subsection (c), 
     except to the extent that such LIBOR Contract is subject to 
     subsection (b) or (e);
       (4) the application to a Board-Selected Benchmark 
     Replacement of any cap, floor, modifier, or spread adjustment 
     to which LIBOR had been subject pursuant to the terms of a 
     LIBOR Contract; or
       (5) any provisions of Federal consumer financial law that 
     require creditors to notify borrowers regarding a change-in-
     terms or that govern the reevaluation of rate increases on 
     credit card accounts under open-end (not home-secured) 
     consumer credit plans.
       (h) Except as provided in section 5(c), the provisions of 
     this Act shall not alter or impair the rights or obligations 
     of any person, or the authorities of any agency, under 
     Federal consumer financial law (as defined in section 
     1002(14) of the Dodd-Frank Wall Street Reform and Consumer 
     Protection Act (12 U.S.C. 5481(14)).

     SEC. 5. CONTINUITY OF CONTRACT AND SAFE HARBOR.

       (a) A Board-Selected Benchmark Replacement and the 
     selection or use of a Board-Selected Benchmark Replacement as 
     a Benchmark Replacement under or in respect of a LIBOR 
     Contract, as well as any Benchmark Replacement Conforming 
     Changes, by operation of section 4 shall constitute--
       (1) a commercially reasonable replacement for and a 
     commercially substantial equivalent to LIBOR;
       (2) a reasonable, comparable, or analogous rate, index, or 
     term for LIBOR;
       (3) a replacement that is based on a methodology or 
     information that is similar or comparable to LIBOR;
       (4) substantial performance by any person of any right or 
     obligation relating to or based on LIBOR; and

[[Page H7481]]

       (5) a replacement that has historical fluctuations that are 
     substantially similar to those of LIBOR for purposes of the 
     Truth in Lending Act and its implementing regulations.
       (b) Neither of (1) the selection or use of a Board-Selected 
     Benchmark Replacement as a Benchmark Replacement or (2) the 
     determination, implementation, or performance of Benchmark 
     Replacement Conforming Changes, in each case by operation of 
     section 4, shall (A) be deemed to impair or affect the right 
     of any person to receive a payment, or to affect the amount 
     or timing of such payment, under any LIBOR Contract or (B) 
     have the effect of (i) discharging or excusing performance 
     under any LIBOR Contract for any reason, claim, or defense 
     (including, but not limited to, any force majeure or other 
     provision in any LIBOR Contract), (ii) giving any person the 
     right to unilaterally terminate or suspend performance under 
     any LIBOR Contract, (iii) constituting a breach of any LIBOR 
     Contract, or (iv) voiding or nullifying any LIBOR Contract.
       (c) No person shall be subject to any claim or cause of 
     action in law or equity or request for equitable relief, or 
     have liability for damages, arising out of--
       (1) the selection or use of a Board-Selected Benchmark 
     Replacement,
       (2) the implementation of Benchmark Replacement Conforming 
     Changes, or
       (3) with respect to a LIBOR Contract that is not a Consumer 
     Loan, the determination of Benchmark Replacement Conforming 
     Changes,
     in each case after giving effect to the provisions of section 
     4; provided, however, that in each case any person (including 
     a Calculating Person) shall remain subject to the terms of a 
     LIBOR Contract that are not affected by this Act and any 
     existing legal, regulatory, or contractual obligations to 
     correct servicing or other ministerial errors under or in 
     respect of a LIBOR Contract.
       (d) The selection or use of a Board-Selected Benchmark 
     Replacement or the determination, implementation, or 
     performance of Benchmark Replacement Conforming Changes, in 
     each case by operation of section 4, shall not be deemed to--
       (1) be an amendment or modification of any LIBOR Contract 
     for the purpose of the governing law of such LIBOR Contract; 
     or
       (2) prejudice, impair, or affect any person's rights, 
     interests, or obligations under or in respect of any LIBOR 
     Contract.
       (e) Except as provided in either subsections (a), (b), or 
     (c) of section 4, the provisions of this Act shall not be 
     interpreted as creating any negative inference or negative 
     presumption regarding the validity or enforceability of--
       (1) any Benchmark Replacement (including any method for 
     calculating, determining, or implementing an adjustment to 
     the Benchmark Replacement to account for any historical 
     differences between LIBOR and the Benchmark Replacement) that 
     is not a Board-Selected Benchmark Replacement; or
       (2) any changes, alterations, or modifications to or in 
     respect of a LIBOR Contract that are not Benchmark 
     Replacement Conforming Changes.

     SEC. 6. PREEMPTION.

       (a) This Act and the regulations hereunder shall supersede 
     any and all laws, statutes, rules, regulations, or standards 
     of any State, the District of Columbia, or any territory or 
     possession of the United States, insofar as they provide for 
     the selection or use of a Benchmark Replacement or related 
     conforming changes.
       (b) No provision of State or local law that expressly 
     limits the manner of calculating interest, including the 
     compounding of interest, shall apply to the selection or use 
     of a Board-Selected Benchmark Replacement or Benchmark 
     Replacement Conforming Changes.

     SEC. 7. TRUST INDENTURE ACT OF 1939.

       Section 316 of the Trust Indenture Act of 1939 (15 U.S.C. 
     77ppp) is amended--
       (1) by striking ``and'' after ``of subsection (a),'' in 
     subsection (b); and
       (2) by inserting ``, and except that the right of any 
     holder of any indenture security to receive payment of the 
     principal of and interest on such indenture security shall 
     not be deemed to be impaired or affected by any change 
     occurring by the application of section 4 of the Adjustable 
     Interest Rate (LIBOR) Act of 2021 to any indenture security'' 
     after ``subject to such lien'' in subsection (b).

     SEC. 8. RULEMAKING.

       Not later than 180 days after the date of enactment of this 
     Act, the Board shall issue such regulations as may be 
     necessary or appropriate to enable it to administer and carry 
     out the purposes of this Act.

     SEC. 9. REVISED CALCULATION RULE TO ADDRESS INSTANCES WHERE 
                   1-MONTH USD LIBOR CEASES OR IS NON-
                   REPRESENTATIVE.

       Section 438(b)(2)(I) of the Higher Education Act of 1965 
     (20 U.S.C. 1087-1(b)(2)(I)) is amended by adding at the end 
     the following:
       ``(viii) Revised calculation rule to address instances 
     where 1-month usd libor ceases or is non-representative.--

       ``(I) Substitute reference index.--The provisions of this 
     clause apply to loans for which the special allowance payment 
     would otherwise be calculated pursuant to clause (vii).
       ``(II) Calculation based on sofr.--For loans described in 
     subclause (III) or (IV), the special allowance payment 
     described in this subclause shall be substituted for the 
     payment provided under clause (vii). For each calendar 
     quarter, the formula for computing the special allowance that 
     would otherwise apply under clause (vii) shall be revised by 
     substituting `of the quotes of the 30-day Average Secured 
     Overnight Financing Rate (SOFR) in effect for each of the 
     days in such quarter as published by the Federal Reserve Bank 
     of New York (or a successor administrator), adjusted daily by 
     adding the Tenor Spread Adjustment, as that term is defined 
     in the Adjustable Interest Rate (LIBOR) Act of 2021, for 1-
     month LIBOR contracts of 0.11448 percent' for `of the 1-month 
     London Inter Bank Offered Rate (LIBOR) for United States 
     dollars in effect for each of the days in such quarter as 
     compiled and released by the British Bankers Association'. 
     The special allowance calculation for loans subject to clause 
     (vii) shall otherwise remain in effect.
       ``(III) Loans eligible for sofr-based calculation.--Except 
     as provided in subclause (IV), the special allowance payment 
     calculated under subclause (II) shall apply to all loans for 
     which the holder (or, if the holder acts as an eligible 
     lender trustee for the beneficial owner of the loan, the 
     beneficial owner of the loan) at any time after the effective 
     date of this clause notifies the Secretary that the holder or 
     beneficial owner affirmatively and permanently elects to 
     waive all contractual, statutory, or other legal rights to a 
     special allowance paid under clause (vii) or to the special 
     allowance paid pursuant to any other formula that was 
     previously in effect with respect to such loan, and accepts 
     the rate described in subclause (II). Any such waiver shall 
     apply to all loans then held, or to be held from time to 
     time, by such holder or beneficial owner; provided that, due 
     to the need to obtain the approval of one of the following, 
     demonstrated to the satisfaction of the Secretary--

       ``(aa) one or more third parties with a legal or beneficial 
     interest in loans eligible for the SOFR-based calculation, or
       ``(bb) a nationally recognized rating organization 
     assigning a rating to a financing secured by loans otherwise 
     eligible for the SOFR-based calculation,

     the holder of the loan (or, if the holder acts as an eligible 
     lender trustee for the beneficial owner of the loan, the 
     beneficial owner of the loan) may elect to apply the rate 
     described in subclause (II) to specified loan portfolios 
     established for financing purposes by separate notices with 
     different effective dates. The special allowance rate based 
     on SOFR shall be effective with respect to a portfolio as of 
     the first day of the calendar quarter following the 
     applicable effective date of the waiver received by the 
     Secretary from the holder or beneficial owner and shall 
     permanently and irrevocably continue for all subsequent 
     quarters.
       ``(IV) Fallback provisions.--

       ``(aa) In the event that a holder or beneficial owner has 
     not elected to waive its rights to a special allowance 
     payment under clause (vii) with respect to a portfolio with 
     an effective date of the waiver prior to the first of--
       ``(AA) the date on which the ICE Benchmark Administration 
     (`IBA') has permanently or indefinitely stopped providing the 
     1-month United States Dollar LIBOR (`1-month USD LIBOR') to 
     the general public,
       ``(BB) the effective date of an official public statement 
     by the IBA or its regulator that the 1-month USD LIBOR is no 
     longer reliable or no longer representative, or
       ``(CC) the LIBOR Replacement Date, as that term is defined 
     in section 3 of the Adjustable Interest Rate (LIBOR) Act of 
     2021,
     the special allowance rate calculation as described in 
     subclause (II) shall, by operation of law, apply to all loans 
     in such portfolio.
       ``(bb) In such event--
       ``(AA) the last determined rate of special allowance based 
     on 1-month USD LIBOR will continue to apply until the end of 
     the then current calendar quarter; and
       ``(BB) the special allowance rate calculation as described 
     in subclause (II) shall become effective as of the first day 
     of the following calendar quarter and remain in effect for 
     all subsequent calendar quarters.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Sherman) and the gentleman from Michigan (Mr. Huizenga) 
each will control 20 minutes.
  The Chair recognizes the gentleman from California.


                             General Leave

  Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on this legislation.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, today we show that the House of Representatives can deal 
with a really big problem before it becomes a crisis and before almost 
anybody even knows that there is a problem. We can deal with such a 
problem without drama, without deadlock, without partisanship. We can 
do it a year and a half before it all explodes, so as to give the 
Senate, the regulatory agencies,

[[Page H7482]]

and the private sector the time that they need to do this job long 
before the impending uncertainty disrupts our economy.
  As co-chair of the CPA Caucus, I am here to certify that this is the 
most important genuinely boring bill that will come before this House 
this year.
  Mr. Speaker, there are trillions of outstanding loans that have 
adjustable interest rates. The adjustment of these loans is tied to the 
London Interbank Offered Rates, known as LIBOR. LIBOR has been referred 
to as the most important interest rate in the world.
  We are dealing here with adjustable rate mortgages, business loans 
and securities, and even some student loans. For many years LIBOR was 
the index. When LIBOR went up, the interest rate on these instruments 
would go up. When LIBOR went down, the interest would go down. For many 
years it worked well.
  LIBOR is based on a survey of British bankers. A few years ago some 
British bankers lied and some went to jail. Our friends across the pond 
said they would stop publishing the LIBOR index. We asked them to keep 
doing it. They are going to stop on June 30, 2023.
  Some $16 trillion of loans and business instruments will still be 
outstanding. Those instruments will specify that you calculate the 
interest rate based on LIBOR, and LIBOR will not exist.
  These $16 trillion of loans and other business instruments do not 
specify what is supposed to happen if you go to calculate the interest 
rate based on LIBOR and there is no LIBOR. That is why they are called 
tough legacy LIBOR instruments.
  We could do what all too often happens in Washington--we could ignore 
the problem. We could then leave it up to tens of thousands of class 
action lawsuits, hundreds of thousands of regular lawsuits, as borrower 
and lender try to figure out what interest rate would apply. That would 
be terrible for our economy and our court system.
  We have got a better idea. The legislation before us today, H.R. 
4616, the Adjustable Interest Rate (LIBOR) Act, which will provide 
borrowers, investors, and all those in the financial space certainty as 
to what happens when LIBOR is no longer published.
  Before I continue, I want to thank Chairwoman Waters and Ranking 
Member McHenry, and their staff for working closely with me to get this 
bill on the floor today. I particularly want to thank Rob Robilliard of 
my staff who has poured his heart and soul into this bill for the 
entire year.
  I am pleased to say that H.R. 4616 has received the support of 21 
business organizations, I would say every business organization with a 
stake in this matter, including the American Bankers Association, the 
Independent Bankers, and the Chamber of Commerce.
  I want to particularly thank Kristi Leo, President of the Structured 
Finance Association, for working with us on this bill. The legislation 
has also won the support of so many public interest groups, including 
the National Consumer Law Center and Americans for Financial Reform.
  I particularly want to thank Andrew Pizor of the National Consumer 
Law Center for his assistance.
  Not only has this legislation received support from these important 
organizations, but every word--and I mean every word--has been 
carefully reviewed by the Federal Reserve Board, the U.S. Treasury 
Department, the Securities and Exchange Commission, the Office of 
Controller of the Currency, the Federal Housing Finance Agency, and the 
Consumer Financial Protection Bureau. We have revised it again and 
again based on their comments.
  Each of these agencies has cleared on every word of the bill before 
us today. Once again, I want to thank the staff, particularly of the 
Federal Reserve, for their excellent work for helping us draft this 
legislation: Mackenzie Gross, Evan Winerman, and Mark Van Der Weide.
  This text before us is a consensus product and all the agencies have 
signed off. We have worked with over 100 different organizations and 
groups, and to my knowledge none oppose the text that is before us 
today.
  I want to thank the Alternative Reference Rate Committee, which was 
convened by the New York Fed which created the structured overnight 
finance rates, which are based on the treasury markets. Those markets 
are public, transparent, and not subject to manipulation. It is a broad 
market. Unlike the LIBOR rate, it is not subject to manipulation.
  This bill provides that as to that $16 trillion of tough legacy 
LIBOR, pursuant to regulations published by the Fed, the various SOFR 
rates that are applicable will stand in for the LIBOR rate once the 
LIBOR rate is no longer published. It sounds simple, but let me tell 
you it has been a hell of a year as you try to get consensus on a bill 
affecting $16 trillion.

  Mr. Speaker, I want to talk a little bit about why this bill is 
necessary and why it is so important. Just 2 months ago, October 20, 
the Federal Reserve, the CFPB, the FDIC in conjunction with the State 
Bank and Credit Union Regulators issued a joint statement stating that 
failure to adequately prepare for LIBOR's discontinuance could 
undermine the financial stability and safety and soundness of the 
institutions they oversee.
  The Financial Stability Oversight Council, which we created in 
response to the 2008 meltdown, said that a cessation of LIBOR has the 
potential to significantly disrupt our financial markets. The SEC 
similarly warned that LIBOR's discontinuance may pose a significant 
risk to our stock and bond markets.
  Secretary Janet Yellen and Federal Reserve Board Chair Powell told us 
that we need legislation to deal with this matter at the Federal level, 
and it is bipartisan. Steve Mnuchin testified to the same thing when he 
was Secretary of the Treasury in the Trump administration.
  Finally, I should point out that Federal Reserve Chair Powell has 
told us that failure to deal with this presents a big financial 
stability risk to our entire economy.
  As to the scope of this bill, it deals only with tough legacy LIBOR. 
It does not deal with those instruments that expire while LIBOR is 
still published, nor does it deal with those instruments that are 
created in the future and do not reference LIBOR.
  There was an earlier draft of this bill that set forth the obvious, 
and that is the substitution of SOFR for the LIBOR index does not 
constitute a sale or exchange for tax purposes. We took that out 
because we wanted to move the bill quickly and not cause a referral to 
the Ways and Means Committee. Mostly we took it out because it was 
absolutely unnecessary.
  It is very clear under existing tax law, the change of one index to 
another index that is incredibly similar, in this case, designed to be 
as close as humanly possible does not constitute a sale or exchange, 
but especially where that change is through the operation of law and 
where the change is necessitated because the original index is no 
longer published. The tax outcome is obvious and does not need to be 
part of the statute.
  The last change we made in this bill was to add the words ``for 
purposes of the governing law of such LIBOR contracts'' to section 
5(d). We did that to make it clear that we weren't dealing with any tax 
issue and anybody could hold it up to a magnifying glass and try to 
find a tax word in it. By putting these words in it we satisfied the 
Committee on Ways and Means. There is no taxation in this statute.
  This law does deal and preempts the field with regard to all non-tax 
law, that means contract, commercial, financial law at both the 
Federal, State, and local level.
  Finally, this act does not prescribe what interest rates ought to be 
used in the future. That is up to the parties involved. Nothing in this 
bill is designed to encourage the use of SOFR or any other particular 
benchmark interest rate, nor does it encourage or authorize any Federal 
regulatory agency to push any bank or other institution to use any 
particular rate in the future. That is up to them.
  This bill deals with $16 trillion of tough legacy LIBOR. It is a 
consensus product. It is the result of the work of regulators, 
industry, and the public interest community.
  Mr. Speaker, I urge its adoption and I reserve the balance of my 
time.

[[Page H7483]]

                                         House of Representatives,


                                  Committee on Ways and Means,

                                 Washington, DC, December 7, 2021.
     Hon. Maxine Waters,
     Chairwoman, Committee on Financial Services,
     Washington, DC.
       Dear Chairwoman Waters: In recognition of the desire to 
     expedite consideration of H.R. 4616, the ``Adjustable 
     Interest Rate (LIBOR) Act of 2021,'' the Committee on Ways 
     and Means agrees to waive formal consideration of the bill as 
     to provisions that fall within the rule X jurisdiction of the 
     Committee on Ways and Means.
       The Committee on Ways and Means takes this action with the 
     mutual understanding that we do not waive any jurisdiction 
     over the subject matter contained in this or similar 
     legislation, and the Committee will be appropriately 
     consulted and involved as the bill or similar legislation 
     moves forward so that we may address any remaining issues 
     within our jurisdiction. The Committee also reserves the 
     right to seek appointment of an appropriate number of 
     conferees to any House-Senate conference involving this or 
     similar legislation.
       Finally, I would appreciate your response to this letter 
     confirming this understanding and would ask that a copy of 
     our exchange of letter on this matter be included in the 
     Congressional Record during floor consideration of H.R. 4616.
           Sincerely,
                                                  Richard E. Neal,
     Chairman.
                                  ____

                                         House of Representatives,


                              Committee on Financial Services,

                                 Washington, DC, December 7, 2021.
      Hon. Richard Neal,
     Chairman, Committee on Ways and Means, Washington, DC.
       Dear Mr. Chairman: I am writing to acknowledge your letter 
     dated December 7, 2021, regarding the waiver by the Committee 
     on Ways and Means of any jurisdictional claims over the 
     matters contained in H.R. 4616, the ``Adjustable Interest 
     Rate (LIBOR) Act of 2021.'' The Committee on Financial 
     Services confirms our mutual understanding that your 
     Committee does not waive any jurisdiction over the subject 
     matter contained in this or similar legislation, and your 
     Committee will be appropriately consulted and involved as 
     this bill or similar legislation moves forward so that we may 
     address any remaining issues within your jurisdiction.
       The Committee on Financial Services further recognizes your 
     interest in appointment of outside conferees from the 
     Committee on Ways and Means should this bill or similar 
     language be considered in a conference with the Senate.
       Pursuant to your request, I will ensure that this exchange 
     of letters is included in the Congressional Record during 
     Floor consideration of the bill. I appreciate your 
     cooperation regarding this legislation and look forward to 
     continuing to work with you as this measure moves through the 
     legislative process.
           Sincerely,
                                                    Maxine Waters,
                                                       Chairwoman.
                                 ______
                                 
         Committee on Education and Labor, House of 
           Representatives,
                                 Washington, DC, December 7, 2021.
     Hon. Maxine Waters,
     Chairwoman, Committee on Financial Services,
     Washington, DC.
       Dear Chairwoman Waters: I write concerning H.R. 4616, the 
     Adjustable Interest Rate (LIBOR) Act of 2021. This bill was 
     primarily referred to the Committee on Financial Services, 
     and additionally to the Committee on Education and Labor. As 
     a result of your having consulted with me concerning this 
     bill generally, I agree to forgo formal consideration of the 
     bill so the bill may proceed expeditiously to the House 
     floor.
       The Committee on Education and Labor takes this action with 
     our mutual understanding that by forgoing formal 
     consideration of H.R. 4616, we do not waive any jurisdiction 
     over the subject matter contained in this or similar 
     legislation, and we will be appropriately consulted and 
     involved as the bill or similar legislation moves forward so 
     we may address any remaining issues within our Rule X 
     jurisdiction. I also request that you support my request to 
     name members of the Committee on Education and Labor to any 
     conference committee to consider such provisions.
       Finally, I would appreciate a response confirming this 
     understanding and ask that a copy of our exchange of letters 
     on this matter be included in the Committee Report filed by 
     the Committee on Financial Services and in the Congressional 
     Record during floor consideration of H.R. 4616.
           Very truly yours,
                                        Robert C. ``Bobby'' Scott,
     Chairman.
                                  ____

                                  Committee on Financial Services,


                                     House of Representatives,

                                 Washington, DC, December 7, 2021.
     Hon. Bobby Scott,
     Chairman, House Committee on Education and Labor, Washington, 
         DC.
       Dear Mr. Chairman: I am writing to acknowledge your letter 
     dated December 7, 2021, regarding the waiver by the Committee 
     on Education and Labor of any jurisdictional claims over the 
     matters contained in H.R. 4616, the ``Adjustable Interest 
     Rate (LIBOR) Act of 2021.'' The Committee on Financial 
     Services confirms our mutual understanding that your 
     Committee does not waive any jurisdiction over the subject 
     matter contained in this or similar legislation, and your 
     Committee will be appropriately consulted and involved as 
     this bill or similar legislation moves forward so that we may 
     address any remaining issues within your jurisdiction.
       The Committee on Financial Services further recognizes your 
     interest in appointment of outside conferees from the 
     Committee on Education and Labor should this bill or similar 
     language be considered in a conference with the Senate.
       Pursuant to your request, I will ensure that this exchange 
     of letters is included in the Congressional Record during 
     Floor consideration of the bill. I appreciate your 
     cooperation regarding this legislation and look forward to 
     continuing to work with you as this measure moves through the 
     legislative process.
           Sincerely,
                                                    Maxine Waters,
                                                       Chairwoman.

  Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume. 
I appreciate the opportunity to be here today and to have this 
conversation.
  This shouldn't be a surprise. We knew this day was coming since 2014. 
The Alternative Reference Rate Committee, the ARRC, has worked 
diligently to help ensure a successful transition from the 
aforementioned LIBOR rate system to a new system.
  In fact, over the last several years, Republicans on the Financial 
Services Committee have raised this issue on numerous occasions with 
our prudential regulators, as well as the Secretary of the Treasury 
under even the last administration.
  I, myself, have asked for a greater focus on this issue, but 
unfortunately, this request seemingly fell on some deaf ears. It was 
unfortunate that my colleagues on the other side seemed to sort of 
forge ahead without having a broader conversation. There was one 
hearing on this issue before we marked up this bill in July. We needed 
to do a better job in socializing this particular issue because now, 
Mr. Speaker, we have a problem.
  We have Members of this Chamber who do not understand the issue and 
don't understand the process, and they look at this as being just 
rushed. They don't see the 2\1/2\, 3, 4, 5 years of having this 
discussion since the London Whale scandal happened where there was a 
manipulation of those international interest rates.
  Here we are today, once again, because of a truncated process, and it 
appears to some of our Members that we are rushing through a bill that 
is going to expand the Federal Government, that could cost the Federal 
Government something, that is going to interfere with private 
contracts. We simply have not done the work to normalize and socialize 
this particular issue.
  This has been described as a once-in-a-generation event, and we are 
talking about financial instruments with hundreds of trillions of 
dollars at stake, including effects that we can't even totally foresee.
  Fast-forward more than 2\1/2\ years, here we are less than a month 
from the deadline, and we are just now voting on a bill to address 
these legacy contracts for the transition from LIBOR.

                              {time}  1145

  This is Washington and, frankly, the process at its worst.
  So how did we get here? Every day, thousands of financial contracts 
attach LIBOR as the interest rate. With LIBOR phasing out, the 
financial system needs legal certainty on what happens to those legacy 
contracts that have this rate already baked in.
  This bill attempts to provide a solution. It offers an alternative 
rate to affected parties who cannot agree on a rate to replace LIBOR.
  To be clear, the rate offered under this legislation is one option. 
It does not prevent these parties from agreeing to something better 
that suits those particular needs of that contract.
  Again, this bill was passed out of committee in July. Now, 4 months 
later, the Committees on Ways and Means and Education and Labor were 
finally able to include their portions of this. That is 4 months of 
inaction that has caused some of that now, today, concern by many on 
this side of the aisle.
  To make this situation more frustrating, we still don't know where 
the Senate stands. I don't, the chair doesn't, and certainly the 
industry doesn't know where the Senate is. Frankly, maybe the Senate 
doesn't know itself. But, hopefully, today will spur them into this 
conversation.

[[Page H7484]]

  The bottom line is this process could have been much, much better. In 
fact, it should have been much, much better. It must be better when we 
are talking about preventing systemic risk to our financial system.
  Our regulators who supervise the financial system have stated that 
this is a satisfactory fix, but I would wager a bitcoin that they 
aren't happy with how we arrived here today.
  As a whole, I would like to thank the regulators for their hard work, 
and, in fact, I do believe that this bill would not be here today 
without their guidance. But this is not the process that Financial 
Services Committee Republicans would have pursued, and it is certainly 
not quite the bill that we would have drafted. But there are trillions 
of dollars at stake, and the safety and soundness of our financial 
system is at the stake, and here we are with an eleventh hour scramble 
again. Unfortunately, that seems to define how Washington, D.C., is 
being run today.
  I will not stand in the way of this process, of allowing this 
process, and the progress for our regulators to be able to supervise 
this financial system. But I do encourage my Republican colleagues to 
trust our regulators and support this legislation despite having some 
doubts about the process of what we are seeing here today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I wish to respond to this gentleman's remarks about the 
process. First, this bill is a good bill. Vote for the bill. There is 
no doubt this bill is a good bill.
  I don't need to talk about the process, but I will for just a second. 
As to whether we had sufficient hearings and enough hearings that match 
the interest of this House, we had a full hearing of my subcommittee on 
this, and it is not as if 400 Members of the House showed up and said: 
We are not a member of the subcommittee, but can we participate?
  It is not as if the balcony is filled. It is not as if we deprived 
our colleagues of information they were anxious to obtain.
  But it is not just one hearing of the subcommittee. I regarded at 
least a dozen of the hearings of the Financial Services Committee over 
the last 2 years as hearings on LIBOR. In my opening remarks, I quoted 
what Secretary Mnuchin said. He said that in response to my questions 
when he came before us at hearings. The gentleman knows that at least 
probably a dozen hearings that we have had at Financial Services where 
we had the Secretary of the Treasury, where we had the Chair of the 
Federal Reserve, where we had other experts, I asked a question about 
LIBOR. And if my colleagues had found this subject near as interesting 
as I do, they would have asked questions about LIBOR as well. So we had 
one hearing dedicated to LIBOR and a dozen and more hearings where 
those dedicated to LIBOR could have asked questions.
  As to whether people in this House should think that we are 
interfering with the rights of businesses to transact business, I 
include in the Record a letter in support of this bill signed by 21 
business groups basically, every business group that deals with any 
instrument tied to the LIBOR index.
                                                 December 7, 2021.
     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Republican Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Pelosi and Republican Leader McCarthy: We, the 
     undersigned organizations, support H.R. 4616, the 
     ``Adjustable Interest Rate (LIBOR) Act,'' to address ``tough 
     legacy'' contracts that currently reference LIBOR. We 
     respectfully request the House of Representatives 
     expeditiously pass this legislation.
       In June 2023, all tenors of US dollar LIBOR, one of the 
     most important financial benchmarks that underpins nearly 
     $200 trillion in financial contracts, will cease to be 
     published. As a result, there are trillions of dollars of 
     hard to modify financial contracts, securities, and loans 
     that use LIBOR--known as ``tough legacy'' contracts--that are 
     unable, before this end date, to either convert to a non-
     LIBOR rate or amend the contracts to add adequate fallback 
     language to another rate. Without federal legislation to 
     address these contracts, investors, consumers, and issuers of 
     securities may face years of uncertainty, litigation, and a 
     change in value. This would thereby create ambiguity that 
     would lead to a reduction in liquidity and an increase in 
     volatility.
       H.R. 4616 provides a solution for these ``tough legacy'' 
     contracts that have insufficient fallback language and cannot 
     otherwise be amended among the parties. The legislation is 
     narrowly crafted to allow parties to contracts that already 
     have effective fallback provisions to opt-out of the 
     legislation and to only apply to tough legacy contracts so 
     that new or future business will not be affected. In 
     addition, the legislation offers uniform, equitable treatment 
     for all U.S. contracts that fall under the federal 
     legislation. It creates a safe harbor from litigation for 
     parties that are covered by the legislation and prevents 
     otherwise inevitable litigation costs and gridlock. The need 
     for uniform federal legislation has been expressed by 
     consumer groups, investors, financial regulators, and 
     industry participants.
       We thank the House Committee on Financial Services for 
     providing a bipartisan solution that offers fair, equitable 
     and consistent treatment for all ``tough legacy'' contracts 
     in support of the LIBOR transition by passing H.R. 4616 out 
     of the committee by voice vote. We wholeheartedly support the 
     Adjustable Interest Rate (LIBOR) Act and ask that you and all 
     Members of the House of Representatives vote in favor of this 
     critical legislation.
           Sincerely,
       Securities Industry and Financial Markets Association 
     (SIFMA); Structured Finance Association (SFA); Bank Policy 
     Institute; National Association of Corporate Treasurers; 
     Education Finance Council; The Loan Syndications and Trading 
     Association (LSTA); The International Swaps and Derivatives 
     Association (ISDA); The Real Estate Roundtable; The Financial 
     Services Forum; Institute of International Bankers; 
     Government Finance Officers Association.
       Mortgage Bankers Association; Commercial Real Estate 
     Finance Council (CREFC); Consumer Bankers Association; 
     Investment Company Institute; Institute for Portfolio 
     Alternatives; Independent Community Bankers of America; U.S. 
     Chamber of Commerce, Center for Capital Markets 
     Competitiveness; Housing Policy Council; Student Loan 
     Servicing Alliance; American Bankers Association; The 
     American Council of Life Insurers (ACLI).

  Mr. SHERMAN. Finally, as to the issue, I agree with the gentleman 
that I would like to have had this bill come up 2\1/2\ years before 
LIBOR ceased to be published. We are bringing this to this House 1\1/2\ 
years before LIBOR ceases to be published. Compared to everything else 
in Washington, that is record time. I speak today on a fiscal year that 
began October 1 where we hope to pass the appropriations bills in 
February. Dealing with a problem 1\1/2\ years before it happens may not 
be 2\1/2\ years in advance, but it is good compared to everything else 
I have seen.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I will reserve my comments for our 
colloquy, but the gentleman certainly knows that communication has been 
slim at best between staff and Members.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Arkansas (Mr. Hill), who is a leader on this issue.
  Mr. HILL. Mr. Speaker, I thank the distinguished ranking member of 
the House Financial Services Committee for yielding and, of course, the 
chairman of the Subcommittee on Investor Protection, Entrepreneurship, 
and Capital Markets, Mr. Sherman, for his leadership. On this side of 
the aisle, there is absolutely no debate that Mr. Sherman has the most 
passion on this topic as a certified public accountant and that his 
questions about improving this bill are unlimited.
  I rise today in support of this effort, flawed as it might be, and 
support the Adjustable Interest Rate Act of 2021.
  As the chairman of the subcommittee said, for decades, the London 
interbank market has been the institutional fixed income rate used by 
hundreds of market participants to benefit American families because 
that LIBOR rate has been a very competitive rate and facilitated 
securities being issued that facilitated in more houses being built for 
more families in America, a liquid market for our families' credit card 
debt, and important student loan debt.
  So this rate is critically important, and it is a part of, also, the 
U.S. dollar, Mr. Speaker, being at the forefront of the global 
securities market.
  As the ranking member on our Housing, Community Development, and 
Insurance Subcommittee, it was the go-to rate for mortgage-backed 
securities and for use of the government secondary mortgage market for 
Fannie Mae and Freddie Mac. I think the chairman has outlined the 
importance of this.
  This bill deals with all those contracts that depended on that LIBOR

[[Page H7485]]

rate that just stubbornly don't have an alternative right now. As we 
approach the end of the quote for this important interest rate, there 
are contracts--the chair says some $16 trillion of bonds outstanding--
that need this replacement contractual rate.
  This bill does not increase government. This bill does not increase 
regulatory power. This bill facilitates the private-sector bond market 
solving this tough, thorny issue for the stubborn minority of bond 
market transactions that we call these legacy issues.
  Now, the gentleman from Michigan, the gentleman from California, and 
I have listened to and worked on this bill for years, and we thought 
the Federal Reserve and the regulators were going to solve this problem 
years ago. That is what they told us years ago.
  But as those years have gone by, they found that they can't solve 
this problem in the regulatory agencies, and they have turned to 
Congress to legislate and craft a narrow fix to solve these tough 
contracts.
  Mr. Speaker, that is why I am in favor of taking this action today. I 
encourage my colleagues on both sides of the aisle--this is a technical 
issue, and it is an eyes-glazed-over issue, but it affects all the 
families in our country. It affects the importance of the U.S. dollar 
in capital markets. When LIBOR concludes in June 2023, we don't want 
any gap, Mr. Speaker, in the ability to have those legacy contracts 
move forward.
  I don't believe this is a bill that anyone should oppose. I think we 
all should support it. It has the support of the six regulatory 
agencies; it has the support of the financial industry; and it deals 
with reality.
  Mr. Speaker, I want to thank my friend from Michigan for yielding me 
the time. I thank him for his work. Yes, this process was flawed, first 
in the hands of the regulators, and, secondly, I think it could have 
been far better in the majority, particularly as it relates to getting 
the views of the Ways and Means Committee and the Education and Labor 
Committee.
  Mr. HUIZENGA. Mr. Speaker, I reserve the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I would simply say to my Republican 
colleagues who may be watching: You don't have to trust the 21 business 
groups who have signed the letter that I just included in the Record, 
and you don't have to trust me. Listen to the words you just heard from 
our colleague, Mr. Hill: This bill does not increase government or 
regulatory power. You ought to vote for the bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to ask the gentleman at this point to 
engage in a colloquy if he is so willing.
  Mr. SHERMAN. Mr. Speaker, I would be thrilled.
  Mr. HUIZENGA. I know this is an issue that is both thrilling and 
exciting, but let me just state that the problem I am hearing from some 
of my colleagues is they don't necessarily understand the depth, 
breadth, and work that has gone into this for years prior to this. They 
know that it is showing up. They are questioning whether there was a 
hearing; they are questioning whether there was a proper markup; and 
sadly, they are questioning that because it seems to be following a 
pattern as of late. That is why there are questions.

  Mr. Hill, others from the committee, and I are trying to alleviate 
that. A number of our colleagues have expressed they haven't had time 
to really dive into it and come to us with those types of questions. So 
we are trying to deal with that.
  But as far as our colloquy here, we both described in our respective 
remarks that it is regulators who ultimately worked on that.
  Mr. Chairman, is that correct?
  Mr. SHERMAN. Will the gentleman yield?
  Mr. HUIZENGA. I yield to the gentleman from California.
  Mr. SHERMAN. This bill reflects an awful lot of work by the 
regulators, particularly the Fed.
  Mr. HUIZENGA. Yes, and the Securities and Exchange Commission, OCC, 
FHA, CFPB, and, of course, the Fed. I appreciate the technical advice 
that each of them has lent and, ultimately, their comments. They 
actually reviewed every change that was made to this bill as sufficient 
to address the issue.
  It is fair to say that it is a fix that these regulators have 
requested. Is that fair?
  Mr. SHERMAN. Absolutely.
  Mr. HUIZENGA. Let's turn to the Senate here.
  It is my understanding, however, that there is no consensus in the 
Senate and that it is unlikely, frankly, that any action in the Senate 
will specifically, exactly reflect this bill.
  Would that be a characterization that you have as well?
  Mr. SHERMAN. I have long advocated for a unicameral legislature.
  Mr. HUIZENGA. I think we can let that reflect as a yes.
  The Senate will probably be acting. We know that they will be acting, 
as has been expressed by the players on the Senate.
  Mr. SHERMAN. If I can comment on that further?
  Mr. HUIZENGA. Please.
  Mr. SHERMAN. The Senate has addressed this issue, and they have 
discussed the bill. Most of the commentary has been positive. There was 
a recent hearing.
  In particular, I believe that Mr. Toomey had a concern that somehow 
this bill would influence future instruments and that somehow 
regulators would be pushing banks, particularly smaller banks, to use 
SOFR in the instruments they draft in the future. That is why the 
report that accompanies this bill makes it excruciatingly clear that 
nothing in this bill authorizes, directs, encourages, or allows a 
regulator to point to this bill and say: Now, bank, you need to use 
SOFR in the instruments used in the future.
  Nothing in this bill authorizes a regulator to push or give a 
preference to any other regulation. The report language was drafted 
with Senator Toomey in mind.

                              {time}  1200

  Mr. HUIZENGA. Mr. Speaker, reclaiming my time on that; that would be 
my understanding of that. And a concern that I had of not having 
``coercion'' is the word that I would use, that private entities could 
be coerced into using a particular declared rate.
  Mr. Speaker, I am prepared to close. I continue to reserve the 
balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  I will simply comment again, for the record. This bill deals with 
tough legacy LIBOR instruments drafted in the past, and nothing in it--
and you can look at every word of all 22 pages--nothing in it would 
allow anyone to say you have got to use SOFR, or you ought to use SOFR, 
or we give you a preference to use SOFR, or any other benchmark in any 
instrument you draft in the future. And just in case that wasn't 
excruciatingly clear, we put it in the report as well.
  Mr. Speaker, I believe I have the right to close. I have no other 
speakers, so I will reserve the balance of my time.
  Mr. HUIZENGA. Mr. Speaker, I yield myself the balance of my time. And 
I will just make a few final points on this bill.
  There are trillions of dollars that are caught up in this, and this 
is about the safety and soundness of our financial system. Whether it 
is mortgages, car loans, you name it, this is an international stage 
where this is being played out on.
  And as I have said, we could do better than an eleventh-hour 
scramble; should have done better than an eleventh-hour scramble, but 
here we are.
  Again, this is not the process that I would have chosen or my 
colleagues on the Republican side would have pursued. It is not the 
bill necessarily that we would have drafted. But I will not stand in 
the way of allowing our regulators to supervise the financial system 
within checks, within proper checks.
  This is not giving them free rein. I do expect that there will be 
changes to occur from the Senate. I look forward to hearing and 
listening to the regulators on those changes.
  I do encourage my Republican colleagues to listen to our regulators, 
but, more so, listen to your Republican colleagues who have been 
working on this issue. And I ask that they support this legislation.

[[Page H7486]]

  And, no, we will not see an increase in government. No, we will not 
see an increase in the regulatory footprint. It clarifies how we are 
going to be dealing with and how these private companies are going to 
need to move forward with the legacy contracts that they have that no 
longer are within the parameters that are allowed because of this fraud 
that had happened within the LIBOR system.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume. 
I am prepared to close.
  As to the process, we have had a dozen hearings with the top 
financial officials in the U.S. Government over a period of 2 or 3 
years at the full committee, in which it was appropriate and, in my 
case, I used this opportunity to bring up the LIBOR issue. They have 
testified again and again that we need Federal legislation.
  Then the six regulatory agencies involved each have reviewed this 
down to the comma, and we have had discussions, down to the comma. They 
have helped us draft legislation.
  My hope is that we not only pass this legislation today, but that my 
Republican colleagues help me pass this bill through the Senate in the 
current form. You want a form that reflects the regulators? Every comma 
reflects what the regulators would like to see.
  It is important that this bill not be held up in the Senate by those 
who want to change existing law and say, well, not only should this act 
not allow a regulator to push a bank toward this or that index, but if 
any other law gives the regulators the power to do that, we should 
strip that authority from them. That is not the purpose of this bill.
  If somebody wants a bill titled, regulators shouldn't be pushed to 
telling banks what to do on indexes, I will work with the gentleman, if 
he wants to, on a freedom to pick your own index bill. This is a bill 
to just deal with LIBOR.
  So my hope is that we will have Republican House Members who urge the 
Senate to move quickly because, yes, it would have been better to deal 
with this issue 2\1/2\ years in advance. We have dealt with it 1\1/2\ 
years in advance; a full hearing, a full markup, a full opportunity for 
anyone to submit amendments at that full markup, and a dozen hearings, 
at which it was appropriate to address questions--at least I did--of 
the top officials in our country dealing with financial matters about 
the importance of LIBOR.
  This bill is important because it deals with $16 trillion of 
instruments where we will not be able to calculate how much the 
borrower must pay the lender after June 30 of 2023 unless we pass this 
bill.
  This is a consensus product. The consumer and public interest groups, 
the business groups, the regulators, and we are passing it and need to 
pass it expeditiously so that we deal with this issue long before it 
disrupts our financial markets.
  Mr. Speaker, I urge its adoption, and I yield back the balance of my 
time.
  The SPEAKER pro tempore (Mr. Kildee). The question is on the motion 
offered by the gentleman from California (Mr. Sherman) that the House 
suspend the rules and pass the bill, H.R. 4616, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. CLOUD. Mr. Speaker, on that I demand the yeas and nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this motion 
are postponed.

                          ____________________