Financial Institution Bankruptcy Act of 2016
Latest action. Received in the Senate and Read twice and referred to the Committee on the Judiciary.
(This measure has not been amended since it was reported to the House on March 23, 2016. The summary of that version is repeated here.)
Financial Institution Bankruptcy Act of 2016
(Sec. 2) This bill amends federal bankruptcy law with respect to a "covered financial corporation" incorporated or organized under any federal or state law (other than a stockbroker, a commodity broker, or a domestic or foreign insurance company or financial institution meeting certain criteria) that is: (1) a bank holding company; or (2) a corporation that exists for the primary purpose of owning, controlling, and financing its subsidiaries, has total consolidated assets of $50 billion or greater, and whose annual gross revenues or consolidated assets meet specified tests.
(Sec. 3) The bill adds "Subchapter V - Liquidation, Reorganization, or Recapitalization of a Covered Financial Corporation," setting forth requirements and prohibitions regarding: (1) commencement of a case concerning a covered financial corporation; (2) a special trustee and bridge company; (3) special transfer of the property of the estate in bankruptcy; (4) treatment of qualified financial contracts and affiliate contracts; (5) licenses, permits, and registrations; (6) exemption from securities laws; and (7) inapplicability of certain avoiding powers.
A debtor holding company may transfer the assets (including executory contracts and unexpired leases) of a covered financial corporation, including the equity in all of its operating subsidiaries, to a newly-formed bridge company over a single weekend, during which a 48-hour stay of debt-collection proceedings (except payment and delivery obligations) shall apply.
The bill permits conversion to chapter 7 (Liquidation) of a case under subchapter V if certain conditions are met.
The Bankruptcy Court may not order an assets transfer unless it determines by a preponderance of the evidence that a transfer is necessary to prevent serious adverse effects on financial stability in the United States.
(Sec. 4) The judicial code is amended to require the Chief Justice of the United States to designate at least 10 bankruptcy judges to be available to hear a Subchapter V case in bankruptcy. Bankruptcy judges may request to be considered for such designation.
Written by analysts at the Congressional Research Service and published on Congress.gov, not by Civibrief. Summarized at the "Passed House amended" stage on April 12, 2016. It describes the bill, it is not the legal text.
Where is it in the process, and what happens next?
4 steps remain before this bill could become law.
The record's latest action, on April 13, 2016: Received in the Senate and Read twice and referred to the Committee on the Judiciary.
- Clearing the committees it was referred to, and being scheduled for a floor vote
- Passage by the House
- Passage by the Senate
- The President's signature. If the President vetoes it, two-thirds of both chambers must vote to override.
How likely is it to become law?
Civibrief does not forecast outcomes and this page has no opinion about this one. What the record supports is a base rate, which is a fact about the whole pile, not a prediction about this measure.
In the 114th Congress (2015-16), 329 of the 10,233 bills and joint resolutions introduced became law, about 3.2 percent. That count covers every measure at every stage, including the many that never left committee.
This one is not there yet: 4 steps are still outstanding, listed above.
Has anyone actually voted on it?
No. No roll call in this Congress cites this measure. That is the ordinary outcome: most measures never reach a recorded floor vote, and a committee ends most of them simply by not acting.
A vote is not the only thing that happens to a measure. Hearings, markups, and referrals are all recorded actions, and none of them is a vote of the full chamber.
Who is behind it?
David Trott (R-MI) introduced it on July 7, 2015, and 4 members have since signed on as cosponsors.
They come from both major parties: 1 Democrat, 3 Republicans.
Cosponsoring is a formal signature on the text. It is not a commitment to vote for the measure, it does not bind anyone's party, and a long list of cosponsors is a measure of attention rather than of prospects.
How long has it been in play?
It was introduced on July 7, 2015, 4083 days ago. The most recent recorded action was 3802 days ago, on April 13, 2016.
Measures do not carry over. Anything the 114th Congress has not finished by January 3, 2017 dies when the term ends, and has to be introduced again from the start in the next Congress.
Every answer above is assembled from this measure's own record on Congress.gov and from published counts of what Congress has passed before. Civibrief does not predict outcomes and takes no position on any measure.
Vote history
- HouseIn committee, no floor vote yet
- SenateAwaits House passage
- PresidentAwaits both chambers