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 as a benchmark replacement nor the determination, implemen- tation, or performance of benchmark replace- ment conforming changes under section 5803 of this title 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 unilater- ally terminate or suspend performance under any LIBOR contract; (C) constituting a breach of any LIBOR contract; or (D) voiding or nullifying any LIBOR con- tract. (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 re- placement 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; provided, however, that in each case any person (including a calcu- lating 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 bench- mark replacement or the determination, imple- mentation, or performance of benchmark re- placement conforming changes under section 5803 of this title shall not be deemed to— (1) be an amendment or modification of any LIBOR contract; or (2) prejudice, impair, or affect the rights, in- terests, or obligations of any person under or with respect to any LIBOR contract. (e) No negative inference Except as provided in subsections 3 (a), (b), or (c)(1) of section 5803 of this title, nothing in this chapter may be construed to create any nega- tive inference or negative presumption regard- ing the validity or enforceability of— (1) any benchmark replacement (including any method for calculating, determining, or implementing an adjustment to the bench- mark replacement to account for any histor- ical differences between LIBOR and the bench- mark replacement) that is not a Board-se- lected benchmark replacement; or (2) any changes, alterations, or modifica- tions to or with respect to a LIBOR contract that are not benchmark replacement con- forming changes. (Pub. L. 117–103, div. U, § 105, Mar. 15, 2022, 136 Stat. 830.) Editorial Notes REFERENCES IN TEXT The Truth in Lending Act, referred to in subsec. (a)(5), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, which is classified generally to subchapter I (§ 1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 101 of Pub. L. 90–321, set out as a Short Title note under section 1601 of Title 15 and Tables. This chapter, referred to in subsecs. (c) and (e), was in the original ‘‘this division’’, meaning div. U of Pub. L. 117–103, Mar. 15, 2022, 136 Stat. 825, known as the Ad- justable 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. § 5805. Benchmark for loans (a) Definitions In this section: