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12 U.S.C. § 5804 — Continuity of contract and safe harbor

Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5804 — Continuity of contract and safe harbor

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Stable record: federal_law:legal_authorities:record_usc_88648531060ed7cdbda069f1
Source file: Laws/federal/codes/united-states-code/title-12/section-5804-continuity-of-contract-and-safe-harbor--420a8044fb.md
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Source location: Title 12, Chapter 55, § 5804; chapter-055-adjustable-interest-rate-libor.md

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**(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 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 5803 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5803&num=0&edition=prelim); 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 chapter 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 5803 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5803&num=0&edition=prelim) 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 subsections 33 So in original. Probably should be “subsection”. (a), (b), or (c)(1) of [section 5803 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5803&num=0&edition=prelim), nothing in this chapter 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.

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5801 — 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 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

15 U.S.C. § 1601 — Congressional findings and declaration of purpose

**(a) Informed use of credit** The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices. **(b) Terms of personal property leases** The Congress also finds that there has been a recent trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that these leases have been offered without adequate cost disclosures. It is the purpose of this subchapter to assure a meaningful disclosure of the terms of leases of personal property for personal, family, or household purposes so as to enable the lessee to compare more readily the various lease terms available to him, limit balloon payments in consumer leasing, enable comparison of lease terms with credit terms where appropriate, and to assure meaningful and accurate disclosures of lease terms in advertisements.

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5803 — 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-

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5804 — Continuity of contract and safe harbor

Page 2026 TITLE 12—BANKS AND BANKING § 5804 1 So in original. Probably should be ‘‘(15 U.S.C. 1601 et seq.)’’. 2 So in original. Probably should be ‘‘that Act.’’ 3 So in original. Probably should be ‘‘subsection’’. Federal consumer financial law, as defined in section 5481 of this title. (Pub. L. 117–103, div. U, § 104, Mar. 15, 2022, 136 Stat. 828.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (f), was in the original ‘‘this division’’, meaning div. U of Pub. L. 117–103, Mar. 15, 2022, 136 Stat. 825, known as the Adjust- able Interest Rate (LIBOR) Act, which is classified principally to this chapter. For complete classification of div. U to the Code, see Short Title note set out under section 5801 of this title and Tables. § 5804. Continuity of contract and safe harbor (a) In general A Board-selected benchmark replacement and the selection or use of a Board-selected bench- mark 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 method- ology or information that is similar or com- parable 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 fluctua- tions that are substantially similar to those of LIBOR for purposes of the Truth in Lending Act (15 U.S.C. 1601 note) 1 and regulations pro- mulgated under that division.2 (b) No impairment Neither the selection or use of a Board-se- lected benchmark replacement a

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 1601 — Congressional findings and declaration of

Page 1452 TITLE 15—COMMERCE AND TRADE § 1601 Sec. 1679f. Noncompliance with this subchapter. 1679g. Civil liability. 1679h. Administrative enforcement. 1679i. Statute of limitations. 1679j. Relation to State law. SUBCHAPTER III—CREDIT REPORTING AGENCIES 1681. Congressional findings and statement of pur- pose. 1681a. Definitions; rules of construction. 1681b. Permissible purposes of consumer reports. 1681c. Requirements relating to information con- tained in consumer reports. 1681c–1. Identity theft prevention; fraud alerts and ac- tive duty alerts. 1681c–2. Block of information resulting from identity theft. 1681c–3. Adverse information in cases of trafficking. 1681d. Disclosure of investigative consumer reports. 1681e. Compliance procedures. 1681f. Disclosures to governmental agencies. 1681g. Disclosures to consumers. 1681h. Conditions and form of disclosure to con- sumers. 1681i. Procedure in case of disputed accuracy. 1681j. Charges for certain disclosures. 1681k. Public record information for employment purposes. 1681l. Restrictions on investigative consumer re- ports. 1681m. Requirements on users of consumer reports. 1681n. Civil liability for willful noncompliance. 1681o. Civil liability for negligent noncompliance. 1681p. Jurisdiction of courts; limitation of actions. 1681q. Obtaining information under false pretenses. 1681r. Unauthorized disclosures by officers or em- ployees. 1681s. Administrative enforcement. 1681s–1. Information on overdue child support obliga- tions. 1681s–2. Responsibilities of furnishers of information to consumer reporting agencies. 1681s–3. Affiliate sharing. 1681t. Relation to State laws. 1681u. Disclosures to FBI for counterintelligence purposes. 1681v. Disclosure

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