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house Bill H.R. 1667

Does Bankruptcy Law Need to be Reformed for Large Financial Institutions?

Argument in favor

This bill is a commonsense, bipartisan fix to bankruptcy law that will let courts resolve the complex bankruptcies of financial institutions that have over $50 billion in assets in an equitable manner.

Michael's Opinion
···
04/05/2017
Is not fair for a company to go bankrupt and still be tax exempt. They are pretty much having the poor people pay their loss business and taxes for them. Look at Donald Trump he bragged that he was smart because he doesn't have pay taxes , file bankruptcy several times and still get money back on taxes he never even paid.
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Jeannette 's Opinion
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03/29/2017
I like this bill, no more government bailouts. It follows the letter of the law. It will be a fast process and it diminishes risk taking. Ending government bailouts something we all witnessed too and experienced. It Put a burden and drain on our economy. Plunging the debt hole to an abyss. This bill will help create a healthy financial system, economic stability and most importantly growth. It makes me want to shout where we going America, to the top, what top, the very top.
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Nate's Opinion
···
04/05/2017
This measure is a no-brainer. It simply fills an important hole in our bankruptcy law that will hopefully prevent financial collapses from spreading to other institutions. It's streamlining. There's no cheating here.
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Argument opposed

There's no need to reform bankruptcy law for dealing with bankruptcies at systemically important financial institutions. Just because a bill has bipartisan support doesn't mean it's a valid policy proposal.

Randy's Opinion
···
04/05/2017
If young kids can't file on their student loans, why should the richest people in the money making business be able to. They are the banks!!! They are in charge of the money!!! They are not individuals who have borrowed an amount of money from a bank. The banks play with borrowers money. They should be held to a higher standard, since they are in a position of trust!!!!
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Jay's Opinion
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04/05/2017
Large financial institutions should NOT be getting any special treatment under bankruptcy law. This would only promote risk taking at the top with the average citizen picking up the tab.
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Julie 's Opinion
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04/05/2017
CEASE ALL LEGISLATIVE BUSINESS IN THE US CONGRESS NOW!! As others have said, this president is under INVESTIGATION!!!!!! This administration is undermining the very foundations of our democracy! Stop stealing the Commons!!
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on the Judiciary
  • The house Passed April 5th, 2017
    Passed by Voice Vote
      house Committees
      Committee on the Judiciary
      Antitrust, Commercial and Administrative Law
    IntroducedMarch 22nd, 2017

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What is House Bill H.R. 1667?

This bill would establish a new bankruptcy process for financial institutions that have more than $50 billion in assets. It seeks to assist larger institutions that may be too complex to resolve a bankruptcy under existing law, and would apply to bank holding companies or other corporations that meet both the $50 billion asset threshold and annual revenue requirements.

The new process would be created within Chapter 11 of the bankruptcy code as subchapter five. It would begin with a covered financial institution filing for bankruptcy and the appointment of a bankruptcy judge to oversee proceedings. A bridge company would be created to receive the bank’s property, and could also receive the its unresolved contracts if certain conditions are met. Licenses, permits, and registrations belonging to the financial institution would be transferred to the bridge company — and would be exempt from securities laws. A special trustee would be appointed by the court to hold the financial institution’s equity securities for the institution’s benefit.

A subchapter five case could be converted to a Chapter 7 bankruptcy where the institutions assets are liquidated if a special trustee has been appointed, the court finds that it’d be in the best interest of creditors, and the transfer has been approved.

The Chief Justice of the U.S. Supreme Court would be required to designate at least three district judges in at least four circuits to serve on a panel to hear appeals in subchapter five bankruptcies. The Chief Justice would also be required to designate a panel of at least 10 bankruptcy judges.

Impact

Financial institutions with more than $50 billion in assets; courts; judges appointed by the Chief Justice to oversee these cases.

Cost of House Bill H.R. 1667

A CBO cost estimate is unavailable.

More Information

In-Depth: Prior to a a subcommittee hearing on this bill, House Judiciary Committee Chairman Bob Goodlatte (R-VA) released the following statement:

“The bill is calibrated carefully to provide transparency, predictability and judicial oversight in a process that must be executed quickly and in a manner that is responsive to potential systemic risk. Additionally, the bill incorporates the ‘‘single point of entry’’ approach, which facilitates a quick transfer of the assets and some of the liabilities of the financial institution’s holding company to a newly formed bridge company. The consensus of experts in public and private industry believes this is the most effective and feasible method to resolve a financial institution that has a bank holding company.”

During the 114th Congress, this legislation unanimously passed the House Judiciary Committee on a 25-0 vote, and passed the House on a voice vote. Currently, the bill has the support of three cosponsors, including two Democrats and one Republican.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user Falcon_33)

AKA

Financial Institution Bankruptcy Act of 2017

Official Title

To amend title 11 of the United States Code in order to facilitate the resolution of an insolvent financial institution in bankruptcy.

    Is not fair for a company to go bankrupt and still be tax exempt. They are pretty much having the poor people pay their loss business and taxes for them. Look at Donald Trump he bragged that he was smart because he doesn't have pay taxes , file bankruptcy several times and still get money back on taxes he never even paid.
    Like (16)
    Follow
    Share
    If young kids can't file on their student loans, why should the richest people in the money making business be able to. They are the banks!!! They are in charge of the money!!! They are not individuals who have borrowed an amount of money from a bank. The banks play with borrowers money. They should be held to a higher standard, since they are in a position of trust!!!!
    Like (289)
    Follow
    Share
    Large financial institutions should NOT be getting any special treatment under bankruptcy law. This would only promote risk taking at the top with the average citizen picking up the tab.
    Like (176)
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    CEASE ALL LEGISLATIVE BUSINESS IN THE US CONGRESS NOW!! As others have said, this president is under INVESTIGATION!!!!!! This administration is undermining the very foundations of our democracy! Stop stealing the Commons!!
    Like (159)
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    CEASE AND DESIST IMMEDIATELY FROM ANY AND ALL CONGRESSIONAL BUSINESS UNTIL YOU HAVE THE RESULTS FROM AN INDEPENDENT INVESTIGATION WITH AN INDEPENDENT SPECIAL PROSECUTOR THAT YOU HAVE APPOINTED TO INVESTIGATE AND PROSECUTE TRUMP HIS CABINET KUSHNER AND ANY CONGRESS PEOPLE INCLUDING NUNES AND PAUL RYAN FOR CRIMINAL OR TRAITOROUS TIES TO RUSSIAN INTERFERENCE WITH OUR GOVERNMENT TO AVOID THE POSSIBILITY OF ENEMY SPONSORED LEGISLATION !!!!!!!!!
    Like (135)
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    We don't need any more special treatment of large banks. We need to break them up
    Like (81)
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    If we changes these laws will make it easier for those corporations to abuse the laws
    Like (48)
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    The main concern I have is the bridge company taking over control of the company filing bankruptcy and then not being subject to securities laws. This sounds more like a way for the banks to protect and hide assets. That being said, if a company mismanages its finances to the tune of $50 billion dollars, then that company and its executive board need to fail. In fact, let the executives take a pay cut, mainly in the form of losing their golden parachutes, to bail out the company before providing bankruptcy protection to the company.
    Like (39)
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    No more breaks to corporations before private citizens! We are watching you!
    Like (32)
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    Hell no large corporations that fail shouldn't get any help especially when they are the cause of a collapsing economy... I'm looking at you Fanny Mae and Freddie Mac.
    Like (25)
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    No, financial institutions do not need bankruptcy reform. They already receive tax breaks. Please be Americans voice and vote no. You should not be protecting big business. You are supposed to be protecting the people. Geez, this is so wrong. Please vote for the people, not the corporations.
    Like (24)
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    They already steel enough in tax credits and now they want to file bankruptcy. Unacceptable
    Like (20)
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    Any legislation concerning financial institutions must protect the consumer and their investment first, next the prosecution of those responsible for overextending or corruption must be prosecuted and the Directors be held personally responsible for their participation in breaking any law, top to bottom everything need to be cleaned out before any bankruptcy is approved.
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    This sounds an awful lot like yet another way for executives to do a bad job at the top while riding a golden parachute out of the burning building that is collapsing on workers. Vote no.
    Like (15)
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    Large financial institutions should not be given any form of special treatment. These institutions have shown us time and time again that they cannot be trusted to do what is right. For example, look how most of the banks use the federal bailout money they received.
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    Whatever happened to "One for all and all for One." Bankruptcy for all and all for Bankruptcy. So color me a red Nay. Large business, composed of individuals should be treated equally as you and me. Too big to fail is a fallacy because CEOs of Big Business know Congressman in high places.
    Like (13)
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    Large financial institutions should not be able to file for bankruptcy protection.
    Like (11)
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    I like this bill, no more government bailouts. It follows the letter of the law. It will be a fast process and it diminishes risk taking. Ending government bailouts something we all witnessed too and experienced. It Put a burden and drain on our economy. Plunging the debt hole to an abyss. This bill will help create a healthy financial system, economic stability and most importantly growth. It makes me want to shout where we going America, to the top, what top, the very top.
    Like (11)
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    The existing bankruptcy process is fine.
    Like (10)
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    Too big to fail has some quiet dealings in this resolution. Obama propagated this concept, which is truthfully a socialistic approach to financial institution in America. The capitalists ate it up, but reality tells us that in a capitalist society no one should be too big to fail. This stinks of that corruption- Obama wasn't clean of it and Trump won't be. I disagree with giving major institutions special treatment, and I disagree with the too big to fail concept.
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