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Los Angeles lawmakers were expected to vote Wednesday on a proposal to renegotiate or terminate an interest rate swap deal from the mid-2000s that critics say now costs the city millions of dollars a year in fees. If successful, the initiative could make the city the nation's largest to challenge ballooning Wall Street levies that accompany similar interest rate swap deals throughout the nation.

The deals in question are highly complex, but boil down to cities, counties, school districts and other public institutions getting locked into interest payments to banks, in many cases for decades. Many of those deals were initiated before the financial crisis of 2008, and because the transactions promised so-called "synthetically" fixed interest rates, they were seen as a way for public institutions to protect themselves against the prospect of higher interest rates and volatility. After the crisis hit, however, central banks helped drive down interest rates far below what they were when the deals were cemented. Yet, the swap arrangements typically prohibit cities from now refinancing their payments with new, lower interest rates without paying what critics say are prohibitively high termination fees.