Vote Smart's Synopsis:

Vote to adopt an amendment to S Amdt 3739 to S 3217 that creates a process for the debt adjustment and bankruptcy of non-bank financial institutions.

Highlights:

• Deletes provisions that provide guidelines and authorization for the Federal Deposit Insurance Corporation to take failing financial companies into receivership (Title II).

• Specifies that Subchapters I-III (with the exception of Secs. 1104(d), 1109, 1112(a), 1115, and 1116) of Chapter 11 (Reorganization) of U.S. Code Title 11 (Bankruptcy) shall apply to cases under the new addition to Title 11 that is created by this amendment in Chapter 14 (Adjustment to the Debts of a Non-Bank Financial Institution) (Sec. 203).

• Prohibits a non-bank financial institution from becoming a debtor under Chapter 14 unless, at least 10 days prior to the filing of the petition, it has taken part in a prepetition consultation (Sec. 203)

• Prohibits a creditor from commencing an involuntary case under Chapter 14 unless, at least 10 days prior to the filing of the petition, it has notified the non-bank financial institution, the functional regulator, and the Financial Stability Oversight Council of its intent to file the petition and has requested a prepetition consultation (Sec. 203).

• Specifies that a prepetition consultation shall include the non-bank financial institution, the functional regulator, the Financial Stability Oversight Council, and any agency charged with administering a nonbankruptcy insolvency regime for any component of the debtor, and that the aim of the consultation shall be to attempt to avoid the need for the institution's liquidation or reorganization in bankruptcy, to make any liquidation or reorganization more orderly, or to aid in the nonbankruptcy resolution of any of the institution's components under its nonbankruptcy insolvency regime (Sec. 203).

Full Bill Text

Full Bill Text