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The U.S. House of Representatives voted 419-1 yesterday to approve a bill sponsored by Rep. Steve Cohen (D-Tenn.) that would extend a bankruptcy-relief measure for National Guard members and Reservists, the Memphis Commercial Appeal reported today. The legislation would extend until the end of 2019 a provision that exempts National Guard members and Reservists filing bankruptcy from being subjected to a "means test" to determine a debtor's ability to repay debts. National Guard members and Reservists who, after Sept. 11, 2001, served on active duty or in a homeland defense activity for at least 90 days already were exempt from the test, but the exemption was set to expire on Saturday.

The spending bill on Capitol Hill no longer includes an amendment that had hedge funds and other investors in Caesar’s Entertainment at loggerheads, the New York Times DealBook blog reported yesterday. The amendment would have made changes in an obscure Depression-era law meant to protect the interests of bondholders in a corporate reorganization. But it was seen as handing a victory to a limited group of investors in Caesars Entertainment and its owner, Apollo Global Management, at the expense of other hedge funds and other investors. The proposal prompted an outpouring of opposition from legal scholars, House Republicans and others, including six big asset managers that made a last-hour appeal in a letter to congressional leaders on Monday to drop the amendment.

ABI's latest podcast features incoming Robert M. Zinman ABI Resident Scholar for the Spring 2016 semester Prof. Melissa Jacoby of the UNC School of Law talking with Prof. Mark Roe of Harvard Law School about recent efforts to to postpone legislative action on a proposed omnibus appropriations rider that would amend the Trust Indenture Act of 1939. Last week, Prof. Roe joined 18 law professors on a letter sent calling for postponement to allow for legislative hearings or the opportunity for public comment on the proposed amendment. Click here to listen to the podcast. 

Click here to read the academics' letter to Congress. 

Prof. Roe is also featured in the New York Times DealBook blog today discussing the recent legislative action on the Trust Indenture Act. 

House Financial Service Committee Chairman Jeb Hensarling (R-Texas) is crafting legislation that would repeal huge swaths of the Dodd-Frank financial reform law, The Hill reported today. Hensarling said that the biggest piece of the sweeping legislation would focus on “too big to fail” and the designation of non-bank financial institutions as “systemically important financial institutions” (SIFIs). “There’s no secret here that we do not believe in the entire SIFI regime,” Hensarling said. He balked at nailing down a timeline for the bill when asked whether it could be ready by the spring.

Wall Street may get one more shot to derail rules championed by the White House that would put tighter restrictions on brokers who advise Americans on saving for retirement, Bloomberg News reported yesterday. While financial firms trying to kill the regulations still face long odds, the industry’s new life could come from a provision that Republican lawmakers and some Democrats are trying to tuck into the $1.1 trillion government spending bill being debated in Congress. The amendment would force the Obama administration to give brokers, insurers and other companies that sell investment products 30 more days to weigh in on the rules before they could be finalized. The regulations in question target what administration officials say is biased financial advice that costs investors billions of dollars a year.

The announcement on the Export-Import Bank’s website proclaimed in big blue letters “Ex-Im Bank Reauthorized” — but the fight is not over yet for the government’s embattled export credit agency, the New York Times reported today. The 81-year-old agency that helps finance many American exports reopened for new business on Monday, ending a five-month hiatus forced by conservative Republicans who have condemned the bank as a prime example of corporate welfare. President Obama on Friday signed legislation tucked into a highway bill that extended the agency’s life four years, through September 2019. Yet an obstacle remains: With three empty seats on its five-member board, the bank lacks a quorum. Until Mr. Obama nominates members, and the Republican-controlled Senate confirms them, Ex-Im Bank can only approve small export deals, not the big orders for aircraft, satellites and major manufacturing equipment the bank is best known for — leaving the likes of Boeing, General Electric and Caterpillar in limbo.

The House Financial Services Committee will hold a hearing today at 10 a.m. ET titled “Oversight of the Financial Stability Oversight Council.” Click here for the witness list and other hearing details.

Proposed changes to an obscure Depression-era law are causing a ruckus among the Wall Street investment funds that are battling over the debt restructuring at Caesars Entertainment and other companies, the New York Times DealBook blog reported yesterday. Tucked away in the omnibus spending bill in Washington, D.C., is an amendment to that law, the Trust Indenture Act of 1939, that critics say would hand a victory to Apollo Global Management, which owns the casino company, at the expense of some bondholders. Hedge funds and other bondholders have been at odds in the Caesars restructuring, which concerns about $10 billion in bond indentures. Six other restructurings could also be affected if the amendment is approved, including that of for-profit college operator Education Management Corporation, which is backed by the private equity giant Kohlberg Kravis Roberts & Company.

Caesars Entertainment Corp. is lobbying to roll back a Depression-era creditor-protection law that could complicate the casino giant’s financial restructuring, the Wall Street Journal reported today. The Las Vegas company and its owner, Apollo Global Management LLC, have been working to support legislation that would amend the Trust Indenture Act of 1939. Some lawmakers, including Sen. Harry Reid (D-Nevada), have pushed to include the measure in a sweeping spending bill that Congress must pass by Friday to avoid a government shutdown. An amendment to the law could gut lawsuits against Caesars brought by bondholders of the company’s bankrupt operating division. The bondholders have filed a lawsuit arguing that transactions that took the Caesars parent company off the hook to guarantee their debt violated the Trust Indenture Act. The law protects creditors against transactions that impair their principal or interest payments.

The Federal Reserve took the final step to ensure it can’t repeat the extraordinary measures taken to rescue American International Group Inc. and Bear Stearns Cos. in 2008, adopting formal restrictions on its ability to help failing financial firms, Bloomberg News reported yesterday. Under the revised authority approved in a 5-0 vote yesterday, the Fed would only be able to save firms in a broad-based scenario including at least five entities at the same time. The changes are designed to reflect Congress’ intention in the 2010 Dodd-Frank Act to prevent the central bank from bailing out individual companies. “The ability to engage in emergency lending through broad-based facilities to ensure liquidity in the financial system is a critical tool for responding to broad and unusual market stress,” Fed Chair Janet Yellen said before the vote. The final rule included “significant changes” reflecting public comments on an initial proposal the Fed released almost two years ago, Yellen said. That wasn’t enough to satisfy critics such as Representative Jeb Hensarling, the Texas Republican who leads the House Financial Services Committee. “Too big to fail is unfortunately alive and well, and this rule from the Federal Reserve doesn’t change that,” Jeb Hensarling said. “Vague rules and bureaucratic discretion are not the answer — they are the problem.”