Title: Adjustable Interest Rate (LIBOR) Act
Policy area: Finance and Financial Sector

Summary:
Adjustable Interest Rate (LIBOR) Act
This bill provides for the transition of certain financial contracts away from the London Interbank Offered Rate (LIBOR), a reference interest rate based upon the lending terms certain banks offer to each other for various lengths of time. LIBOR is set to be retired in 2023. Various financial contracts reference LIBOR as a benchmark for prevailing interest rates and use LIBOR in calculating certain payments or obligations.
In the event a contract referencing LIBOR does not have a fallback or replacement rate provision in effect when LIBOR is retired, or a replacement rate is not selected by a determining person as defined by the bill, the bill provides for a transition to a replacement rate selected by the Board of Governors of the Federal Reserve System. The bill also provides for conforming changes to these contracts, the continuity and enforceability of these contracts, and protections against liability as a result of such a transition.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3779 Introduced in Senate (IS)]

<DOC>






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.

    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''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that--
            (1) LIBOR is used as a benchmark rate in more than 
        $200,000,000,000,000 worth 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 nonrepresentativeness 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 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;
            (3) to allow existing contracts that reference LIBOR but 
        provide for the use of a clearly defined and practicable 
        replacement rate, to operate according to their terms; and
            (4) to address LIBOR references in Federal law.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Benchmark.--The term ``benchmark'' means 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.--The term ``benchmark 
        administrator'' means a person that publishes a benchmark for 
        use by third parties.
            (3) Benchmark replacement.--The term ``benchmark 
        replacement'' means 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 with 
        respect to a LIBOR contract.
            (4) Benchmark replacement conforming changes.--The term 
        ``benchmark replacement conforming changes'' means any 
        technical, administrative, or operational changes, alterations, 
        or modifications that--
                    (A) the Board determines, in its discretion, would 
                address 1 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 with respect to a LIBOR 
                contract after giving due consideration to any 
                benchmark replacement conforming changes under 
                subparagraph (A).
            (5) Board.--The term ``Board'' means the Board of Governors 
        of the Federal Reserve System.
            (6) Board-selected benchmark replacement.--The term 
        ``Board-selected benchmark replacement'' means a benchmark 
        replacement identified by the Board that is based on SOFR, 
        including any tenor spread adjustment pursuant to section 4(e).
            (7) Calculating person.--The term ``calculating person'' 
        means, with respect to any LIBOR contract, any person, 
        including the determining person, responsible for calculating 
        or determining any valuation, payment, or other measurement 
        based on a benchmark.
            (8) Consumer; credit.--The terms ``consumer'' and 
        ``credit'' have the meanings given the terms in section 103 of 
        the Truth in Lending Act (15 U.S.C. 1602).
            (9) Consumer loan.--The term ``consumer loan'' means a 
        consumer credit transaction.
            (10) Determining person.--The term ``determining person'' 
        means, with respect to any LIBOR contract, any person with the 
        authority, right, or obligation, including on a temporary basis 
        (as identified by the LIBOR contract or by the governing law of 
        the LIBOR contract, as appropriate) to determine a benchmark 
        replacement.
            (11) Fallback provisions.--The term ``fallback provisions'' 
        means terms in a LIBOR contract for determining a benchmark 
        replacement, including any terms relating to the date on which 
        the benchmark replacement becomes effective.
            (12) IBOR.--The term ``IBOR'' means LIBOR, any tenor of 
        non-U.S. dollar currency rates formerly known as the London 
        interbank offered rate as administered by ICE Benchmark 
        Administration Limited (or any predecessor or successor 
        administrator thereof), and any other interbank offered rates 
        that are expected to cease.
            (13) IBOR benchmark replacement.--The term ``IBOR benchmark 
        replacement'' means 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 an IBOR), to replace an IBOR or any 
        interest rate or dividend rate based on an IBOR, whether on a 
        temporary, permanent, or indefinite basis, under or with 
        respect to an IBOR contract.
            (14) IBOR contract.--The term ``IBOR contract'' means any 
        contract, agreement, indenture, organizational document, 
        guarantee, mortgage, deed of trust, lease, security (whether 
        representing debt or equity, 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 an IBOR as a benchmark.
            (15) LIBOR.--The term ``LIBOR''--
                    (A) means 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 administrator thereof); and
                    (B) does not include the 1-week or 2-month tenors 
                of U.S. dollar LIBOR.
            (16) LIBOR contract.--The term ``LIBOR contract'' means any 
        contract, agreement, indenture, organizational document, 
        guarantee, mortgage, deed of trust, lease, security (whether 
        representing debt or equity, including any interest in a 
        corporation, a partnership, or a limited liability company), 
        instrument, or other obligation or asset that, by its terms, 
        uses LIBOR as a benchmark.
            (17) LIBOR replacement date.--The term ``LIBOR replacement 
        date'' means 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.
            (18) Security.--The term ``security'' has the meaning given 
        the term in section 2(a) of the Securities Act of 1933 (15 
        U.S.C. 77b(a)).
            (19) SOFR.--The term ``SOFR'' means the Secured Overnight 
        Financing Rate published by the Federal Reserve Bank of New 
        York (or a successor administrator).
            (20) Tenor spread adjustment.--The term ``tenor spread 
        adjustment'' means--
                    (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) In General.--On the LIBOR replacement date, the Board-selected 
benchmark replacement shall 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) Fallback Provisions.--On the LIBOR replacement date, any 
reference 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) Authority of Determining Person.--
            (1) In general.--Subject to subsection (f)(2), a 
        determining person may select the Board-selected benchmark 
        replacement as the benchmark replacement.
            (2) Selection.--Any selection by a determining person of 
        the Board-selected benchmark replacement pursuant to paragraph 
        (1) shall be--
                    (A) irrevocable;
                    (B) made by the earlier of the LIBOR replacement 
                date and the latest date for selecting a benchmark 
                replacement according to the terms of the LIBOR 
                contract; and
                    (C) used in any determinations of the benchmark 
                under or with respect to the LIBOR contract occurring 
                on and after the LIBOR replacement date.
            (3) No selection.--If a determining person does not select 
        a benchmark replacement by the date specified in paragraph 
        (2)(B), the Board-selected benchmark replacement, on and after 
        the LIBOR replacement date, shall be the benchmark replacement 
        for the LIBOR contract.
    (d) Conforming Changes.--
            (1) In general.--If the Board-selected benchmark 
        replacement becomes the benchmark replacement for a LIBOR 
        contract pursuant to subsection (a) or (c), all benchmark 
        replacement conforming changes shall become an integral part of 
        the LIBOR contract.
            (2) No consent required.--A calculating person shall not be 
        required to obtain consent from any other person prior to the 
        adoption of benchmark replacement conforming changes.
    (e) Adjustment by Board.--
            (1) In general.--Except as provided in paragraph (2), on 
        the LIBOR replacement date, the Board shall adjust the Board-
        selected benchmark replacement for each category of LIBOR 
        contract that the Board may identify to include the relevant 
        tenor spread adjustment.
            (2) Consumer loans.--For LIBOR contracts that are consumer 
        loans, the Board shall adjust the Board-selected benchmark 
        replacement as follows:
                    (A) During the 1-year period beginning on the LIBOR 
                replacement date, incorporate an amount, to be 
                determined for any business day during that period, 
                that transitions linearly from the difference between 
                the Board-selected benchmark replacement and the 
                corresponding LIBOR tenor determined as of the day 
                immediately before the LIBOR replacement date to the 
                relevant tenor spread adjustment.
                    (B) On and after the date that is 1 year after the 
                LIBOR replacement date, incorporate the relevant tenor 
                spread adjustment.
    (f) Rule of Construction.--Nothing in this Act may be construed to 
alter or impair--
            (1) any written agreement specifying that a LIBOR contract 
        shall not be subject to this Act;
            (2) except as provided in subsection (b), any LIBOR 
        contract that contains fallback provisions that identify a 
        benchmark replacement that is not based in any way on any LIBOR 
        value (including the prime rate or the effective Federal funds 
        rate);
            (3) except as provided in subsection (b) or (c)(3), any 
        LIBOR contract subject to subsection (c)(1) as to which a 
        determining person does not elect to use a Board-selected 
        benchmark replacement pursuant to that subsection;
            (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;
            (5) any provision of Federal consumer financial law that--
                    (A) requires creditors to notify borrowers 
                regarding a change-in-terms; or
                    (B) governs the reevaluation of rate increases on 
                credit card accounts under open-ended (not home-
                secured) consumer credit plans; or
            (6) except as provided in section 5(c), the rights or 
        obligations of any person, or the authorities of any agency, 
        under Federal consumer financial law, as defined in section 
        1002 of the Consumer Financial Protection Act of 2010 (12 
        U.S.C. 5481).

SEC. 5. CONTINUITY OF CONTRACT AND SAFE HARBOR.

    (a) In General.--A Board-selected benchmark replacement and the 
selection or use of a Board-selected benchmark replacement as a 
benchmark replacement under or with respect to a LIBOR contract, and 
any benchmark replacement conforming changes, 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
            (5) a replacement that has historical fluctuations that are 
        substantially similar to those of LIBOR for purposes of the 
        Truth in Lending Act (15 U.S.C. 1601 note) and regulations 
        promulgated under that Act.
    (b) No Impairment.--Neither the selection or use of a Board-
selected benchmark replacement as a benchmark replacement nor the 
determination, implementation, or performance of benchmark replacement 
conforming changes under section 4 may--
            (1) 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
            (2) have the effect of--
                    (A) discharging or excusing performance under any 
                LIBOR contract for any reason, claim, or defense 
                (including any force majeure or other provision in any 
                LIBOR contract);
                    (B) giving any person the right to unilaterally 
                terminate or suspend performance under any LIBOR 
                contract;
                    (C) constituting a breach of any LIBOR contract; or
                    (D) voiding or nullifying any LIBOR contract.
    (c) Safe Harbor.--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 with respect to a LIBOR contract.
    (d) Selection.--The selection or use of a Board-selected benchmark 
replacement or the determination, implementation, or performance of 
benchmark replacement conforming changes under section 4 shall not be 
deemed to--
            (1) be an amendment or modification of any LIBOR contract; 
        or
            (2) prejudice, impair, or affect the rights, interests, or 
        obligations of any person under or with respect to any LIBOR 
        contract.
    (e) No Negative Inference.--Except as provided in subsection (a), 
(b), or (c)(1) of section 4, nothing in this Act may be construed to 
create 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 with 
        respect to a LIBOR contract that are not benchmark replacement 
        conforming changes.

SEC. 6. BENCHMARK FOR LOANS.

    (a) Definitions.--In this section:
            (1) Bank.--The term ``bank'' means an institution subject 
        to examination by a Federal financial institutions regulatory 
        agency.
            (2) Covered action.--The term ``covered action'' means--
                    (A) the initiation by a Federal supervisory agency 
                of an enforcement action, including the issuance of a 
                cease-and-desist order; or
                    (B) the issuance by a Federal supervisory agency of 
                a matter requiring attention, a matter requiring 
                immediate attention; or a matter requiring board 
                attention resulting from a supervisory activity 
                conducted by the Federal supervisory agency.
            (3) Federal financial institutions regulatory agency.--The 
        term ``Federal financial institutions regulatory agencies'' has 
        the meaning given the term in section 1003 of the Federal 
        Financial Institutions Examination Council Act of 1978 (12 
        U.S.C. 3302).
            (4) Federal supervisory agency.--The term ``Federal 
        supervisory agency'' means an agency listed in subparagraphs 
        (A) through (H) of section 1101(7) of the Right to Financial 
        Privacy Act of 1978 (12 U.S.C. 3401(7)).
            (5) Non-IBOR loan.--The term ``non-IBOR loan'' means any 
        loan that, by its terms, does not use in any way LIBOR, any 
        tenor of non-U.S. dollar currency rates formerly known as the 
        London interbank offered rate as administered by ICE Benchmark 
        Administration Limited (or any predecessor or successor 
        administrator thereof), and any other interbank offered rates 
        that are expected to cease, as a benchmark.
    (b) Benchmarks Used by Banks.--With respect to a benchmark used by 
a bank--
            (1) the bank, in any non-IBOR loan made before, on, or 
        after the date of enactment of this Act, may use any benchmark, 
        including a benchmark that is not SOFR, that the bank 
        determines to be appropriate for the funding model of the bank; 
        the needs of the customers of the bank; and the products, risk 
        profile, risk management capabilities, and operational 
        capabilities of the bank; provided, however, that the use of 
        any benchmark shall remain subject to the terms of the non-IBOR 
        loan, and applicable law; and
            (2) no Federal supervisory agency may take any covered 
        action against the bank solely because that benchmark is not 
        SOFR.

SEC. 7. PREEMPTION.

    This Act, and regulations promulgated under this Act, shall 
supersede any provision of any State or local law, statute, rule, 
regulation, or standard--
            (1) relating to the selection or use of a benchmark 
        replacement or related conforming changes; or
            (2) expressly limiting the manner of calculating interest, 
        including the compounding of interest, as that provision 
        applies to the selection or use of a Board-selected benchmark 
        replacement or benchmark replacement conforming changes.

SEC. 8. TRUST INDENTURE ACT OF 1939.

    Section 316(b) of the Trust Indenture Act of 1939 (15 U.S.C. 
77ppp(b)) is amended--
            (1) by striking ``, except as'' and inserting ``, except--
            ``(1) as'';
            (2) in paragraph (1), as so designated, by striking ``(a), 
        and except that'' and inserting ``(a);
            ``(2) that'';
            (3) in paragraph (2), as so designated, by striking the 
        period at the end and inserting ``; and''; and
            (4) by adding at the end the following:
            ``(3) 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 to any indenture 
        security.''.

SEC. 9. AMENDMENT TO THE HIGHER EDUCATION ACT OF 1965.

    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, 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, 
                                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 
                                                defined in section 3 of 
                                                the Adjustable Interest 
                                                Rate (LIBOR) Act,

                                        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.''.

SEC. 10. RULEMAKING.

    Not later than 180 days after the date of enactment of this Act, 
the Board shall promulgate regulations to carry out this Act.
                                 <all>