Lenders anxiously await Fed’s proposed guidance on Libor transition
Lenders anxiously await Fed’s proposed guidance on Libor transition
Abstract
Lenders have until June 30, 2023, to transition all existing Libor-based loans. The rule requires transitioning consumer loans to a'substantially similar' rate. If alternative rates fail to meet the CFPB’s similar test they will have to be refinanced. Lenders originating Libor loans before it was required to price them over a Libor replacement rate, at the start of this year. Lenders may. may have used the “fallback” language. The ARRC was recommended in 2020. It provided guidance for which replacement rate to use after the transition. TheARRC is expected to be included in the 'fallback' language. She said she expects that language to be used in the Fed’�s rule.