DODD-FRANK/TREASURY/TRUMP MEMORANDA: “Presidential Memorandum for the Secretary of the Treasury
Orderly Liquidation Authority
Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203 (the “Dodd-Frank Act”), established an Orderly Liquidation Authority (OLA). Using OLA, the Secretary of the Treasury (Secretary) may place a financial company in receivership and initiate liquidation after making a determination, in consultation with the President, that it is in default or in danger of default and its failure and resolution under otherwise applicable law would have serious adverse effects on financial stability in the United States, among other considerations. Further, under section 203(b) of the Dodd-Frank Act, 12 U.S.C. 5383(b), OLA shall not be invoked unless and until the Secretary determines, in consultation with the President, that use of OLA would “avoid or mitigate” adverse effects on financial stability in the United States, “taking into consideration the effectiveness of the action in mitigating” those potential effects, “the cost to the general fund of the Treasury,” and “the potential to increase excessive risk taking on the part of creditors, counterparties, and shareholders in the financial company.” In addition, section 214(c) of the Dodd-Frank Act, 12 U.S.C. 5394(c), requires that taxpayers shall “bear no losses from the exercise of” OLA.”
-Donald Trump, “Presidential Memorandum for the Secretary of the Treasury,” White House Office of the Press Secretary, April 21, 2017