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12 U.S.C. § 5801 — Findings and purpose
Federal law — U.S. Code and appendices · legal_authorities
**(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 chapter—
(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.
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Stable record: federal_law:legal_authorities:record_usc_05670ce173b65c7730d2f009
Source file: Laws/federal/codes/united-states-code/title-12/section-5801-findings-and-purpose--de582488af.md
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Source location: Title 12, Chapter 55, § 5801; chapter-055-adjustable-interest-rate-libor.md
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**(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 chapter—
(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.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Findings** In order to assure (1) that the limitation on interest payments or other conditions (or both) on loans made or insured under this part, do not impede or threaten to impede the carrying out of the purposes of this part or do not cause the return to holders of loans to be less than equitable, (2) that incentive payments on such loans are paid promptly to eligible lenders, and (3) that appropriate consideration of relative administrative costs and money market conditions is made in setting the quarterly rate of such payments, the Congress finds it necessary to establish an improved method for the determination of the quarterly rate of the special allowances on such loans, and to provide for a thorough, expeditious, and objective examination of alternative methods for the determination of the quarterly rate of such allowances.
**(b) Computation and payment**
(1) **Quarterly payment based on unpaid balance** — A special allowance shall be paid for each of the 3-month periods ending March 31, June 30, September 30, and December 31 of every year and the amount of such allowance paid to any holder with respect to any 3-month period shall be a percentage of the average unpaid balance of principal (not including unearned interest added to principal) of all eligible loans held by such holder during such period.
(2) **Rate of special allowance**
(A) Subject to subparagraphs (B), (C), (D), (E), (F), (G), (H), and (I) and paragraph (4), the special allowance paid pursuant to this subsection on loans shall be computed (i) by determining the average of the bond equivalent rates of 91-day Treasury bills auctioned for such 3-month period, (ii) by subtracting the applicable interest rate on such loans from such average, (iii) by adding 3.10 percent to the resultant
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Directions and waivers by bondholders** The indenture to be qualified—
(1) shall automatically be deemed (unless it is expressly provided therein that any such provision is excluded) to contain provisions authorizing the holders of not less than a majority in principal amount of the indenture securities or if expressly specified in such indenture, of any series of securities at the time outstanding (A) to direct the time, method, and place of conducting any proceeding for any remedy available to such trustee, or exercising any trust or power conferred upon such trustee, under such indenture, or (B) on behalf of the holders of all such indenture securities, to consent to the waiver of any past default and its consequences; or
(2) may contain provisions authorizing the holders of not less than 75 per centum in principal amount of the indenture securities or if expressly specified in such indenture, of any series of securities at the time outstanding to consent on behalf of the holders of all such indenture securities to the postponement of any interest payment for a period not exceeding three years from its due date.
For the purposes of this subsection and paragraph (3) of subsection (d) of section 77ooo of this title, in determining whether the holders of the required principal amount of indenture securities have concurred in any such direction or consent, indenture securities owned by any obligor upon the indenture securities, or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with any such obligor, shall be disregarded, except that for the purposes of determining whether the indenture trustee shall be protected in relying on any such direction or consent, only indenture securities which such trustee k
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Federal law — U.S. Code and appendices · legal_authorities
In this chapter:
(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 benchmar
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5802
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Federal law — U.S. Code and appendices · legal_authorities
**(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-
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5803
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Federal law — U.S. Code and appendices · legal_authorities
**(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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1601&num=0&edition=prelim) note) 11 So in original. Probably should be “([15 U.S.C. 1601](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1601&num=0&edition=prelim) et seq.)”. and regulations promulgated under that division.22 So in original. Probably should be “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 5803 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5803&num=0&edition=prelim) 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 contrac
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5804
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Federal law — U.S. Code and appendices · legal_authorities
This chapter, and regulations promulgated under this chapter, 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.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5806
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Federal law — U.S. Code and appendices · legal_authorities
Not later than 180 days after March 15, 2022, the Board shall promulgate regulations to carry out this chapter.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5807
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Federal law — U.S. Code and appendices · legal_authorities
Page 2023
TITLE 12—BANKS AND BANKING
§ 5802
(2) Sex offense certification
With respect to funds received by a partici-
pating State under the Program, any private
entity that receives a loan, a loan guarantee,
or other financial assistance using such funds
after March 11, 2021, shall certify to the par-
ticipating State that the principals of such en-
tity have not been convicted of a sex offense
against a minor (as such terms are defined in
section 20911 of title 34).
(c) Prohibition on pornography
None of the funds made available under this
chapter may be used to pay the salary of any in-
dividual engaged in activities related to the Pro-
gram who has been officially disciplined for vio-
lations of subpart G of the Standards of Ethical
Conduct for Employees of the Executive Branch
for viewing, downloading, or exchanging pornog-
raphy, including child pornography, on a Fed-
eral Government computer or while performing
official Federal Government duties.
(Pub. L. 111–240, title III, § 3011, Sept. 27, 2010, 124
Stat. 2581; Pub. L. 113–188, title IX, § 901(d), Nov.
26, 2014, 128 Stat. 2020; Pub. L. 117–2, title III,
§ 3301(a)(1)(G), Mar. 11, 2021, 135 Stat. 69.)
Editorial Notes
AMENDMENTS
2021—Subsec. (b). Pub. L. 117–2 substituted ‘‘March 11,
2021’’ for ‘‘September 27, 2010’’ in pars. (1) and (2).
2014—Subsecs. (b) to (d). Pub. L. 113–188 redesignated
subsecs. (c) and (d) as (b) and (c), respectively, and
struck out former subsec. (b). Prior to amendment, text
of subsec. (b) read as follows: ‘‘The Comptroller General
of the United States shall perform an annual audit of
the Program and issue a report to the appropriate com-
mittees of Congress containing the results of such
audit.’’
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 202
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 5801
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