Financial Institution Bankruptcy Act of 2016

H.R. 2947, the Financial Institution Bankruptcy Act of 2016, creates a specialized process within the federal bankruptcy code to handle the failure of large, complex financial institutions with assets over $50 billion. The bill allows a failing bank holding company to transfer its healthy assets and subsidiaries to a newly formed "bridge company" over a single weekend, while leaving its debts behind in the bankruptcy estate. This process is designed to prevent a sudden collapse that could destabilize the broader economy, ensuring that the bank’s essential functions—such as processing payments and managing deposits—continue without interruption while the company is reorganized or liquidated.