The United States Treasury Department has heeded calls from global banks and some regulators not to dismantle the orderly liquidation authority provision in the Dodd-Frank Act. Conservative legislators have attacked the OLA as a backdoor way to bail out “too big to fail” financial firms with taxpayer money. That’s because under Dodd-Frank the FDIC has the authority to use the OLA to seize a failing financial institution and with the backing of the Treasury provide sufficient liquidity to stabilize it.
When President Trump asked for a review of the OLA last April, there was concern that the Treasury would recommend the repeal of the OLA, said Paul Lee
, Of Counsel to Debevoise & Plimpton, and former Chair of the firm’s Banking Group. Trump warned that the OLA might in fact increase risk in the financial system. “There was a substantial risk Treasury would push for repeals and that would have put more pressure on the legislative process,” Lee said.
US Treasury backs off OLA repeal
By Philip Scipio
24 February 2018