SAN JUAN, Puerto Rico – Puerto Rico's House of Representatives has approved a bill that would allow the U.S. territory's governor to declare a fiscal emergency and implement a debt moratorium.
Gov. Alejandro Garcia Padilla is expected to sign the bill soon, in part to help protect the island's Government Development Bank. The bank that issues loans and oversees debt transactions is running out of money and could face insolvency amid a decade-long economic crisis.
Legislators approved the bill before dawn on Wednesday because they said time was running out to address the bank's situation. The bill would allow the bank to enter into receivership if needed.
Credit holders that own a portion of the island's $70 billion debt load blasted the measure and warned of lawsuits.