WASHINGTON—The so-called “Too Big To Fail” bill advanced in Congress late last week.
In this case, the proposed legislation addresses the bankruptcy code and was included in a financial services budget bill that the House has passed.
The House also moved on a proposal to bring the Consumer Financial Protection Bureau under Congress’ purview.
The Financial Institutions Bankruptcy Act would establish a section of the bankruptcy code specifically for large financial firms. The Wall Street Journal reported it is designed to ensure a repeat of 2008’s failure of Lehman Brothers does not occur again.
Under the bill, the Journal reported, regulators and bankruptcy judges would have more power and flexibility to review the liabilities of the failing firm and to stabilize operations. The bill’s primary sponsor is Rep. David Trott (R-MI).