PROMESA Explained

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) prevented creditors from suing Puerto Rico on a bond default worth two billion dollars. Congress’s attempt to help the island recover from its financial problems revolves around the creation of a seven-member oversight board. Members of the board were appointed to three-year terms by President Obama on August 31, 2016.

The board has the power to approve budgets, fiscal plans, determine which projects get funding, and veto debt issuances.

The island’s governor has a nonvoting position on the board. Only one of the voting seats must be held by an appointee who either resides on the island or owns a business on Puerto Rico.

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