12 U.S.C. § 5801

Current through P.L. 118-106 (published on www.congress.gov on 10/04/2024)

Section 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.

12 U.S.C. § 5801

Pub. L. 117-103, div. U, §102, Mar. 15, 2022, 136 Stat. 825.

EDITORIAL NOTES

REFERENCES IN TEXTThis chapter, referred to in subsec. (b), was in the original "this division", meaning div. U of Pub. L. 117-103, 136 Stat. 825, known as the Adjustable 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 below and Tables.

STATUTORY NOTES AND RELATED SUBSIDIARIES

SHORT TITLE Pub. L. 117-103, div. U, §101, Mar. 15, 2022, 136 Stat. 825, provided that: "This division [enacting this chapter and amending section 77ppp of Title 15, Commerce and Trade, and section 1087-1 of Title 20, Education] may be cited as the 'Adjustable Interest Rate (LIBOR) Act'."

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.