II 

117TH CONGRESS 

2D SESSION S. 3779 

To establish a clear and uniform process, on a nationwide basis, for replacing 

the London interbank offered rate in existing contracts, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 8 (legislative day, MARCH 7), 2022 

Mr. TESTER (for himself, Mr. TILLIS, Mr. BROWN, Mr. TOOMEY, Mr. 

ROUNDS, Mr. REED, Mr. HAGERTY, and Mr. WARNER) introduced the 

following bill; which was read twice and referred to the Committee on 

Banking, Housing, and Urban Affairs 

A BILL 

To establish a clear and uniform process, on a nationwide 

basis, for replacing the London interbank offered rate 

in existing contracts, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Adjustable Interest 

5 Rate (LIBOR) Act’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds that— 


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1 (1) LIBOR is used as a benchmark rate in 

2 more than $200,000,000,000,000 worth of contracts 

3 worldwide; 

4 (2) a significant number of existing contracts 

5 that reference LIBOR do not provide for the use of 

6 a clearly defined or practicable replacement bench7 mark rate when LIBOR is discontinued; and 

8 (3) the cessation or nonrepresentativeness of 

9 LIBOR could result in disruptive litigation related 

10 to existing contracts that do not provide for the use 

11 of a clearly defined or practicable replacement 

12 benchmark rate. 

13 (b) PURPOSE.—It is the purpose of this Act— 

14 (1) to establish a clear and uniform process, on 

15 a nationwide basis, for replacing LIBOR in existing 

16 contracts the terms of which do not provide for the 

17 use of a clearly defined or practicable replacement 

18 benchmark rate, without affecting the ability of par19 ties to use any appropriate benchmark rate in new 

20 contracts; 

21 (2) to preclude litigation related to existing con22 tracts the terms of which do not provide for the use 

23 of a clearly defined or practicable replacement 

24 benchmark rate; 


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1 (3) to allow existing contracts that reference 

2 LIBOR but provide for the use of a clearly defined 

3 and practicable replacement rate, to operate accord4 ing to their terms; and 

5 (4) to address LIBOR references in Federal 

6 law. 

7 SEC. 3. DEFINITIONS. 

8 In this Act: 

9 (1) BENCHMARK.—The term ‘‘benchmark’’ 

10 means an index of interest rates or dividend rates 

11 that is used, in whole or in part, as the basis of or 

12 as a reference for calculating or determining any 

13 valuation, payment, or other measurement. 

14 (2) BENCHMARK ADMINISTRATOR.—The term 

15 ‘‘benchmark administrator’’ means a person that 

16 publishes a benchmark for use by third parties. 

17 (3) BENCHMARK REPLACEMENT.—The term 

18 ‘‘benchmark replacement’’ means a benchmark, or 

19 an interest rate or dividend rate (which may or may 

20 not be based in whole or in part on a prior setting 

21 of LIBOR), to replace LIBOR or any interest rate 

22 or dividend rate based on LIBOR, whether on a 

23 temporary, permanent, or indefinite basis, under or 

24 with respect to a LIBOR contract. 


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1 (4) BENCHMARK REPLACEMENT CONFORMING

2 CHANGES.—The term ‘‘benchmark replacement con3 forming changes’’ means any technical, administra4 tive, or operational changes, alterations, or modifica5 tions that— 

6 (A) the Board determines, in its discretion, 

7 would address 1 or more issues affecting the 

8 implementation, administration, and calculation 

9 of the Board-selected benchmark replacement in 

10 LIBOR contracts; or 

11 (B) solely with respect to a LIBOR con12 tract that is not a consumer loan, in the rea13 sonable judgment of a calculating person, are 

14 otherwise necessary or appropriate to permit 

15 the implementation, administration, and cal16 culation of the Board-selected benchmark re17 placement under or with respect to a LIBOR 

18 contract after giving due consideration to any 

19 benchmark replacement conforming changes 

20 under subparagraph (A). 

21 (5) BOARD.—The term ‘‘Board’’ means the 

22 Board of Governors of the Federal Reserve System. 

23 (6) BOARD-SELECTED BENCHMARK REPLACE24 MENT.—The term ‘‘Board-selected benchmark re25 placement’’ means a benchmark replacement identiVerDate Sep 11 2014 01:44 Mar 09, 2022 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779

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1 fied by the Board that is based on SOFR, including 

2 any tenor spread adjustment pursuant to section 

3 4(e). 

4 (7) CALCULATING PERSON.—The term ‘‘calcu5 lating person’’ means, with respect to any LIBOR 

6 contract, any person, including the determining per7 son, responsible for calculating or determining any 

8 valuation, payment, or other measurement based on 

9 a benchmark. 

10 (8) CONSUMER; CREDIT.—The terms ‘‘con11 sumer’’ and ‘‘credit’’ have the meanings given the 

12 terms in section 103 of the Truth in Lending Act 

13 (15 U.S.C. 1602). 

14 (9) CONSUMER LOAN.—The term ‘‘consumer 

15 loan’’ means a consumer credit transaction. 

16 (10) DETERMINING PERSON.—The term ‘‘deter17 mining person’’ means, with respect to any LIBOR 

18 contract, any person with the authority, right, or ob19 ligation, including on a temporary basis (as identi20 fied by the LIBOR contract or by the governing law 

21 of the LIBOR contract, as appropriate) to determine 

22 a benchmark replacement. 

23 (11) FALLBACK PROVISIONS.—The term ‘‘fall24 back provisions’’ means terms in a LIBOR contract 

25 for determining a benchmark replacement, including 


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1 any terms relating to the date on which the bench2 mark replacement becomes effective. 

3 (12) IBOR.—The term ‘‘IBOR’’ means 

4 LIBOR, any tenor of non-U.S. dollar currency rates 

5 formerly known as the London interbank offered 

6 rate as administered by ICE Benchmark Adminis7 tration Limited (or any predecessor or successor ad8 ministrator thereof), and any other interbank offered 

9 rates that are expected to cease. 

10 (13) IBOR BENCHMARK REPLACEMENT.—The 

11 term ‘‘IBOR benchmark replacement’’ means a 

12 benchmark, or an interest rate or dividend rate 

13 (which may or may not be based in whole or in part 

14 on a prior setting of an IBOR), to replace an IBOR 

15 or any interest rate or dividend rate based on an 

16 IBOR, whether on a temporary, permanent, or in17 definite basis, under or with respect to an IBOR 

18 contract. 

19 (14) IBOR CONTRACT.—The term ‘‘IBOR con20 tract’’ means any contract, agreement, indenture, or21 ganizational document, guarantee, mortgage, deed of 

22 trust, lease, security (whether representing debt or 

23 equity, including any interest in a corporation, a 

24 partnership, or a limited liability company), instru25 ment, or other obligation or asset that, by its terms, 


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1 continues in any way to use an IBOR as a bench2 mark. 

3 (15) LIBOR.—The term ‘‘LIBOR’’— 

4 (A) means the overnight and 1-, 3-, 6-, 

5 and 12-month tenors of U.S. dollar LIBOR 

6 (formerly known as the London interbank of7 fered rate) as administered by ICE Benchmark 

8 Administration Limited (or any predecessor or 

9 successor administrator thereof); and 

10 (B) does not include the 1-week or 2- 

11 month tenors of U.S. dollar LIBOR. 

12 (16) LIBOR CONTRACT.—The term ‘‘LIBOR 

13 contract’’ means any contract, agreement, indenture, 

14 organizational document, guarantee, mortgage, deed 

15 of trust, lease, security (whether representing debt 

16 or equity, including any interest in a corporation, a 

17 partnership, or a limited liability company), instru18 ment, or other obligation or asset that, by its terms, 

19 uses LIBOR as a benchmark. 

20 (17) LIBOR REPLACEMENT DATE.—The term 

21 ‘‘LIBOR replacement date’’ means the first London 

22 banking day after June 30, 2023, unless the Board 

23 determines that any LIBOR tenor will cease to be 

24 published or cease to be representative on a different 

25 date. 


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1 (18) SECURITY.—The term ‘‘security’’ has the 

2 meaning given the term in section 2(a) of the Secu3 rities Act of 1933 (15 U.S.C. 77b(a)). 

4 (19) SOFR.—The term ‘‘SOFR’’ means the 

5 Secured Overnight Financing Rate published by the 

6 Federal Reserve Bank of New York (or a successor 

7 administrator). 

8 (20) TENOR SPREAD ADJUSTMENT.—The term 

9 ‘‘tenor spread adjustment’’ means— 

10 (A) 0.00644 percent for overnight LIBOR; 

11 (B) 0.11448 percent for 1-month LIBOR; 

12 (C) 0.26161 percent for 3-month LIBOR; 

13 (D) 0.42826 percent for 6-month LIBOR; 

14 and 

15 (E) 0.71513 percent for 12-month LIBOR. 

16 SEC. 4. LIBOR CONTRACTS. 

17 (a) IN GENERAL.—On the LIBOR replacement date, 

18 the Board-selected benchmark replacement shall be the 

19 benchmark replacement for any LIBOR contract that, 

20 after giving any effect to subsection (b)— 

21 (1) contains no fallback provisions; or 

22 (2) contains fallback provisions that identify 

23 neither— 

24 (A) a specific benchmark replacement; nor 

25 (B) a determining person. 


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1 (b) FALLBACK PROVISIONS.—On the LIBOR re2 placement date, any reference in the fallback provisions 

3 of a LIBOR contract to— 

4 (1) a benchmark replacement that is based in 

5 any way on any LIBOR value, except to account for 

6 the difference between LIBOR and the benchmark 

7 replacement; or 

8 (2) a requirement that a person (other than a 

9 benchmark administrator) conduct a poll, survey, or 

10 inquiries for quotes or information concerning inter11 bank lending or deposit rates; 

12 shall be disregarded as if not included in the fallback pro13 visions of such LIBOR contract and shall be deemed null 

14 and void and without any force or effect. 

15 (c) AUTHORITY OF DETERMINING PERSON.— 

16 (1) IN GENERAL.—Subject to subsection (f)(2), 

17 a determining person may select the Board-selected 

18 benchmark replacement as the benchmark replace19 ment. 

20 (2) SELECTION.—Any selection by a deter21 mining person of the Board-selected benchmark re22 placement pursuant to paragraph (1) shall be— 

23 (A) irrevocable; 

24 (B) made by the earlier of the LIBOR re25 placement date and the latest date for selecting 


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1 a benchmark replacement according to the 

2 terms of the LIBOR contract; and 

3 (C) used in any determinations of the 

4 benchmark under or with respect to the LIBOR 

5 contract occurring on and after the LIBOR re6 placement date. 

7 (3) NO SELECTION.—If a determining person 

8 does not select a benchmark replacement by the date 

9 specified in paragraph (2)(B), the Board-selected 

10 benchmark replacement, on and after the LIBOR re11 placement date, shall be the benchmark replacement 

12 for the LIBOR contract. 

13 (d) CONFORMING CHANGES.— 

14 (1) IN GENERAL.—If the Board-selected bench15 mark replacement becomes the benchmark replace16 ment for a LIBOR contract pursuant to subsection 

17 (a) or (c), all benchmark replacement conforming 

18 changes shall become an integral part of the LIBOR 

19 contract. 

20 (2) NO CONSENT REQUIRED.—A calculating 

21 person shall not be required to obtain consent from 

22 any other person prior to the adoption of benchmark 

23 replacement conforming changes. 

24 (e) ADJUSTMENT BY BOARD.— 


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1 (1) IN GENERAL.—Except as provided in para2 graph (2), on the LIBOR replacement date, the 

3 Board shall adjust the Board-selected benchmark re4 placement for each category of LIBOR contract that 

5 the Board may identify to include the relevant tenor 

6 spread adjustment. 

7 (2) CONSUMER LOANS.—For LIBOR contracts 

8 that are consumer loans, the Board shall adjust the 

9 Board-selected benchmark replacement as follows: 

10 (A) During the 1-year period beginning on 

11 the LIBOR replacement date, incorporate an 

12 amount, to be determined for any business day 

13 during that period, that transitions linearly 

14 from the difference between the Board-selected 

15 benchmark replacement and the corresponding 

16 LIBOR tenor determined as of the day imme17 diately before the LIBOR replacement date to 

18 the relevant tenor spread adjustment. 

19 (B) On and after the date that is 1 year 

20 after the LIBOR replacement date, incorporate 

21 the relevant tenor spread adjustment. 

22 (f) RULE OF CONSTRUCTION.—Nothing in this Act 

23 may be construed to alter or impair— 

24 (1) any written agreement specifying that a 

25 LIBOR contract shall not be subject to this Act; 


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1 (2) except as provided in subsection (b), any 

2 LIBOR contract that contains fallback provisions 

3 that identify a benchmark replacement that is not 

4 based in any way on any LIBOR value (including 

5 the prime rate or the effective Federal funds rate); 

6 (3) except as provided in subsection (b) or 

7 (c)(3), any LIBOR contract subject to subsection 

8 (c)(1) as to which a determining person does not 

9 elect to use a Board-selected benchmark replacement 

10 pursuant to that subsection; 

11 (4) the application to a Board-selected bench12 mark replacement of any cap, floor, modifier, or 

13 spread adjustment to which LIBOR had been sub14 ject pursuant to the terms of a LIBOR contract; 

15 (5) any provision of Federal consumer financial 

16 law that— 

17 (A) requires creditors to notify borrowers 

18 regarding a change-in-terms; or 

19 (B) governs the reevaluation of rate in20 creases on credit card accounts under open21 ended (not home-secured) consumer credit 

22 plans; or 

23 (6) except as provided in section 5(c), the rights 

24 or obligations of any person, or the authorities of 

25 any agency, under Federal consumer financial law, 


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1 as defined in section 1002 of the Consumer Finan2 cial Protection Act of 2010 (12 U.S.C. 5481). 

3 SEC. 5. CONTINUITY OF CONTRACT AND SAFE HARBOR. 

4 (a) IN GENERAL.—A Board-selected benchmark re5 placement and the selection or use of a Board-selected 

6 benchmark replacement as a benchmark replacement 

7 under or with respect to a LIBOR contract, and any 

8 benchmark replacement conforming changes, shall con9 stitute— 

10 (1) a commercially reasonable replacement for 

11 and a commercially substantial equivalent to 

12 LIBOR; 

13 (2) a reasonable, comparable, or analogous rate, 

14 index, or term for LIBOR; 

15 (3) a replacement that is based on a method16 ology or information that is similar or comparable to 

17 LIBOR; 

18 (4) substantial performance by any person of 

19 any right or obligation relating to or based on 

20 LIBOR; and 

21 (5) a replacement that has historical fluctua22 tions that are substantially similar to those of 

23 LIBOR for purposes of the Truth in Lending Act 

24 (15 U.S.C. 1601 note) and regulations promulgated 

25 under that Act. 


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1 (b) NO IMPAIRMENT.—Neither the selection or use 

2 of a Board-selected benchmark replacement as a bench3 mark replacement nor the determination, implementation, 

4 or performance of benchmark replacement conforming 

5 changes under section 4 may— 

6 (1) be deemed to impair or affect the right of 

7 any person to receive a payment, or to affect the 

8 amount or timing of such payment, under any 

9 LIBOR contract; or 

10 (2) have the effect of— 

11 (A) discharging or excusing performance 

12 under any LIBOR contract for any reason, 

13 claim, or defense (including any force majeure 

14 or other provision in any LIBOR contract); 

15 (B) giving any person the right to unilater16 ally terminate or suspend performance under 

17 any LIBOR contract; 

18 (C) constituting a breach of any LIBOR 

19 contract; or 

20 (D) voiding or nullifying any LIBOR con21 tract. 

22 (c) SAFE HARBOR.—No person shall be subject to 

23 any claim or cause of action in law or equity or request 

24 for equitable relief, or have liability for damages, arising 

25 out of— 


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1 (1) the selection or use of a Board-selected 

2 benchmark replacement, 

3 (2) the implementation of benchmark replace4 ment conforming changes, or 

5 (3) with respect to a LIBOR contract that is 

6 not a consumer loan, the determination of bench7 mark replacement conforming changes, 

8 in each case after giving effect to the provisions of section 

9 4; provided, however, that in each case any person (includ10 ing a calculating person) shall remain subject to the terms 

11 of a LIBOR contract that are not affected by this Act 

12 and any existing legal, regulatory, or contractual obliga13 tions to correct servicing or other ministerial errors under 

14 or with respect to a LIBOR contract. 

15 (d) SELECTION.—The selection or use of a Board16 selected benchmark replacement or the determination, im17 plementation, or performance of benchmark replacement 

18 conforming changes under section 4 shall not be deemed 

19 to— 

20 (1) be an amendment or modification of any 

21 LIBOR contract; or 

22 (2) prejudice, impair, or affect the rights, inter23 ests, or obligations of any person under or with re24 spect to any LIBOR contract. 


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1 (e) NO NEGATIVE INFERENCE.—Except as provided 

2 in subsection (a), (b), or (c)(1) of section 4, nothing in 

3 this Act may be construed to create any negative inference 

4 or negative presumption regarding the validity or enforce5 ability of— 

6 (1) any benchmark replacement (including any 

7 method for calculating, determining, or imple8 menting an adjustment to the benchmark replace9 ment to account for any historical differences be10 tween LIBOR and the benchmark replacement) that 

11 is not a Board-selected benchmark replacement; or 

12 (2) any changes, alterations, or modifications to 

13 or with respect to a LIBOR contract that are not 

14 benchmark replacement conforming changes. 

15 SEC. 6. BENCHMARK FOR LOANS. 

16 (a) DEFINITIONS.—In this section: 

17 (1) BANK.—The term ‘‘bank’’ means an insti18 tution subject to examination by a Federal financial 

19 institutions regulatory agency. 

20 (2) COVERED ACTION.—The term ‘‘covered ac21 tion’’ means— 

22 (A) the initiation by a Federal supervisory 

23 agency of an enforcement action, including the 

24 issuance of a cease-and-desist order; or 


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1 (B) the issuance by a Federal supervisory 

2 agency of a matter requiring attention, a mat3 ter requiring immediate attention; or a matter 

4 requiring board attention resulting from a su5 pervisory activity conducted by the Federal su6 pervisory agency. 

7 (3) FEDERAL FINANCIAL INSTITUTIONS REGU8 LATORY AGENCY.—The term ‘‘Federal financial in9 stitutions regulatory agencies’’ has the meaning 

10 given the term in section 1003 of the Federal Finan11 cial Institutions Examination Council Act of 1978 

12 (12 U.S.C. 3302). 

13 (4) FEDERAL SUPERVISORY AGENCY.—The 

14 term ‘‘Federal supervisory agency’’ means an agency 

15 listed in subparagraphs (A) through (H) of section 

16 1101(7) of the Right to Financial Privacy Act of 

17 1978 (12 U.S.C. 3401(7)). 

18 (5) NON-IBOR LOAN.—The term ‘‘non-IBOR 

19 loan’’ means any loan that, by its terms, does not 

20 use in any way LIBOR, any tenor of non-U.S. dollar 

21 currency rates formerly known as the London inter22 bank offered rate as administered by ICE Bench23 mark Administration Limited (or any predecessor or 

24 successor administrator thereof), and any other 


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1 interbank offered rates that are expected to cease, as 

2 a benchmark. 

3 (b) BENCHMARKS USED BY BANKS.—With respect to 

4 a benchmark used by a bank— 

5 (1) the bank, in any non-IBOR loan made be6 fore, on, or after the date of enactment of this Act, 

7 may use any benchmark, including a benchmark 

8 that is not SOFR, that the bank determines to be 

9 appropriate for the funding model of the bank; the 

10 needs of the customers of the bank; and the prod11 ucts, risk profile, risk management capabilities, and 

12 operational capabilities of the bank; provided, how13 ever, that the use of any benchmark shall remain 

14 subject to the terms of the non-IBOR loan, and ap15 plicable law; and 

16 (2) no Federal supervisory agency may take 

17 any covered action against the bank solely because 

18 that benchmark is not SOFR. 

19 SEC. 7. PREEMPTION. 

20 This Act, and regulations promulgated under this 

21 Act, shall supersede any provision of any State or local 

22 law, statute, rule, regulation, or standard— 

23 (1) relating to the selection or use of a bench24 mark replacement or related conforming changes; or 


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1 (2) expressly limiting the manner of calculating 

2 interest, including the compounding of interest, as 

3 that provision applies to the selection or use of a 

4 Board-selected benchmark replacement or bench5 mark replacement conforming changes. 

6 SEC. 8. TRUST INDENTURE ACT OF 1939. 

7 Section 316(b) of the Trust Indenture Act of 1939 

8 (15 U.S.C. 77ppp(b)) is amended— 

9 (1) by striking ‘‘, except as’’ and inserting ‘‘, 

10 except— 

11 ‘‘(1) as’’; 

12 (2) in paragraph (1), as so designated, by strik13 ing ‘‘(a), and except that’’ and inserting ‘‘(a); 

14 ‘‘(2) that’’; 

15 (3) in paragraph (2), as so designated, by strik16 ing the period at the end and inserting ‘‘; and’’; and 

17 (4) by adding at the end the following: 

18 ‘‘(3) that the right of any holder of any inden19 ture security to receive payment of the principal of 

20 and interest on such indenture security shall not be 

21 deemed to be impaired or affected by any change oc22 curring by the application of section 4 of the Adjust23 able Interest Rate (LIBOR) Act to any indenture 

24 security.’’. 


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1 SEC. 9. AMENDMENT TO THE HIGHER EDUCATION ACT OF 

2 1965. 

3 Section 438(b)(2)(I) of the Higher Education Act of 

4 1965 (20 U.S.C. 1087–1(b)(2)(I)) is amended by adding 

5 at the end the following: 

6 ‘‘(viii) REVISED CALCULATION RULE

7 TO ADDRESS INSTANCES WHERE 1-MONTH

8 USD LIBOR CEASES OR IS NON-REP9 RESENTATIVE.— 

10 ‘‘(I) SUBSTITUTE REFERENCE

11 INDEX.—The provisions of this clause 

12 apply to loans for which the special al13 lowance payment would otherwise be 

14 calculated pursuant to clause (vii). 

15 ‘‘(II) CALCULATION BASED ON

16 SOFR.—For loans described in sub17 clause (III) or (IV), the special allow18 ance payment described in this sub19 clause shall be substituted for the 

20 payment provided under clause (vii). 

21 For each calendar quarter, the for22 mula for computing the special allow23 ance that would otherwise apply under 

24 clause (vii) shall be revised by sub25 stituting ‘of the quotes of the 30-day 

26 Average Secured Overnight Financing 


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1 Rate (SOFR) in effect for each of the 

2 days in such quarter as published by 

3 the Federal Reserve Bank of New 

4 York (or a successor administrator), 

5 adjusted daily by adding the tenor 

6 spread adjustment, as that term is de7 fined in the Adjustable Interest Rate 

8 (LIBOR) Act, for 1-month LIBOR 

9 contracts of 0.11448 percent’ for ‘of 

10 the 1-month London Inter Bank Of11 fered Rate (LIBOR) for United 

12 States dollars in effect for each of the 

13 days in such quarter as compiled and 

14 released by the British Bankers Asso15 ciation’. The special allowance calcula16 tion for loans subject to clause (vii) 

17 shall otherwise remain in effect. 

18 ‘‘(III) LOANS ELIGIBLE FOR

19 SOFR-BASED CALCULATION.—Except 

20 as provided in subclause (IV), the spe21 cial allowance payment calculated 

22 under subclause (II) shall apply to all 

23 loans for which the holder (or, if the 

24 holder acts as an eligible lender trust25 ee for the beneficial owner of the loan, 


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1 the beneficial owner of the loan) at 

2 any time after the effective date of 

3 this clause notifies the Secretary that 

4 the holder or beneficial owner affirma5 tively and permanently elects to waive 

6 all contractual, statutory, or other 

7 legal rights to a special allowance paid 

8 under clause (vii) or to the special al9 lowance paid pursuant to any other 

10 formula that was previously in effect 

11 with respect to such loan, and accepts 

12 the rate described in subclause (II). 

13 Any such waiver shall apply to all 

14 loans then held, or to be held from 

15 time to time, by such holder or bene16 ficial owner; provided that, due to the 

17 need to obtain the approval of, dem18 onstrated to the satisfaction of the 

19 Secretary— 

20 ‘‘(aa) one or more third par21 ties with a legal or beneficial in22 terest in loans eligible for the 

23 SOFR-based calculation; or 

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1 ing a rating to a financing se2 cured by loans otherwise eligible 

3 for the SOFR-based calculation, 

4 the holder of the loan (or, if the hold5 er acts as an eligible lender trustee 

6 for the beneficial owner of the loan, 

7 the beneficial owner of the loan) may 

8 elect to apply the rate described in 

9 subclause (II) to specified loan port10 folios established for financing pur11 poses by separate notices with dif12 ferent effective dates. The special al13 lowance rate based on SOFR shall be 

14 effective with respect to a portfolio as 

15 of the first day of the calendar quar16 ter following the applicable effective 

17 date of the waiver received by the Sec18 retary from the holder or beneficial 

19 owner and shall permanently and ir20 revocably continue for all subsequent 

21 quarters. 

22 ‘‘(IV) FALLBACK PROVISIONS.— 

23 ‘‘(aa) In the event that a 

24 holder or beneficial owner has 

25 not elected to waive its rights to 


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1 a special allowance payment 

2 under clause (vii) with respect to 

3 a portfolio with an effective date 

4 of the waiver prior to the first 

5 of— 

6 ‘‘(AA) the date on 

7 which the ICE Benchmark 

8 Administration (‘IBA’) has 

9 permanently or indefinitely 

10 stopped providing the 1- 

11 month United States Dollar 

12 LIBOR (‘1-month USD 

13 LIBOR’) to the general pub14 lic; 

15 ‘‘(BB) the effective 

16 date of an official public 

17 statement by the IBA or its 

18 regulator that the 1-month 

19 USD LIBOR is no longer 

20 reliable or no longer rep21 resentative; or 

22 ‘‘(CC) the LIBOR re23 placement date, as defined 

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1 able Interest Rate (LIBOR) 

2 Act, 

3 the special allowance rate calcula4 tion as described in subclause 

5 (II) shall, by operation of law, 

6 apply to all loans in such port7 folio. 

8 ‘‘(bb) In such event— 

9 ‘‘(AA) the last deter10 mined rate of special allow11 ance based on 1-month USD 

12 LIBOR will continue to 

13 apply until the end of the 

14 then current calendar quar15 ter; and 

16 ‘‘(BB) the special al17 lowance rate calculation as 

18 described in subclause (II) 

19 shall become effective as of 

20 the first day of the following 

21 calendar quarter and remain 

22 in effect for all subsequent 

23 calendar quarters.’’. 


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•S 3779 IS

1 SEC. 10. RULEMAKING. 

2 Not later than 180 days after the date of enactment 

3 of this Act, the Board shall promulgate regulations to 

4 carry out this Act. 

Æ 


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