The U.S. House approved legislation designed to protect trillions of dollars of assets from chaos when LIBOR expires, in one of the final key steps aimed at guaranteeing an orderly transition from the discredited benchmark.

By a vote of 415-9, House lawmakers on Wednesday backed provisions to switch the most troublesome contracts—including mortgages, business debt, and student loans—to a replacement benchmark, in an effort to prevent a flood of litigation when U.S. dollar LIBOR retires. The bill will now head to the Senate, where its fate is uncertain.

Bankers, investors, and regulators see such proposals as crucial to ensuring that a large swath of the U.S. financial system isn't disrupted. The move follows similar legislation in New York state to protect Wall Street that passed in March, and a regulatory decision to extend key dollar LIBORs until mid-2023 to allow trillions of dollars of contracts to die off naturally.

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