Presidential Memorandum Regarding Orderly Liquidation Authority

April 21, 2017

On Friday, April 21, 2017, President Trump issued a memorandum for the Secretary of the Treasury to review the Orderly Liquidation Authority (OLA) and then report its findings to the President within 180 days. The review must consider the following: the adverse impact of failing financial companies on the financial stability of the US, whether the OLA is consistent with the rules of Executive Order 13772 that the President signed in early February; Core Principles for Regulating the US Financial System, whether OLA could result in costs to the Treasury (i.e. taxpayers), and whether the availability of OLA could lead to excessive risk-taking. The memorandum will suspend the use of OLA until the Treasury Department has a chance to study the impact of OLA and the potentially harmful consequences of its availability and use. The Treasury Department will evaluate whether or not legislative solutions will be necessary to fulfill OLA’s policy goals in a more effective way without creating a moral hazard.