House Financial Services Committee Considers Legislative LIBOR Fix

The U.S. House Committee on Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets (the "Subcommittee") considered legislation and testimony concerning the transition from the London Inter-Bank Offered Rate ("LIBOR").

At a hearing titled "The End of LIBOR: Transitioning to an Alternative Interest Rate Calculation for Mortgages, Student Loans, Business Borrowing, and Other Financial Products," the Subcommittee considered the Adjustable Interest Rate (LIBOR) Act of 2021. The Adjustable Interest Rate (LIBOR) Act of 2021 would allow contracts referencing LIBOR without adequate fallback provisions upon LIBOR's discontinuation, to reference the Secured Overnight Financing Rate ("SOFR") without the need for an amendment or the concern of becoming subject to litigation. The legislation would require the Federal Reserve Board ("FRB") to establish regulations regarding how SOFR or an adjusted SOFR should be used as a replacement