Skip to main content

NCUA Joins With Other Agencies in Statement on LIBOR

WASHINGTON– NCUA has joined with four other federal financial regulatory agencies and state credit union regulators in issuing a statement that the use of United States Dollar LIBOR (USD LIBOR) panels will end on June 30, 2023. 

“The statement reiterates the agencies’ expectations that financial institutions with USD LIBOR exposure should complete their transition of remaining LIBOR contracts as soon as practicable. Accordingly, the (agencies are) urging banks and nonbanks alike to continue their efforts to adequately prepare for the sunset of USD LIBOR,” the agencies said in releasing the statement.

LIBOR

The statement notes that the financial services industry uses USD LIBOR as a reference interest rate for many consumer financial products, including adjustable rate mortgage loans, reverse mortgages, home equity lines of credit, credit cards, and student loans. 

“The approaching discontinuation of USD LIBOR in June 2023 presents numerous consumer protection, financial, litigation, and operational risks,” the statement notes. “For instance, if financial institutions do not issue required disclosures, consumers may not know when the transition from USD LIBOR will occur or how the interest rates they pay will be calculated.”
The agencies, which include the CFPB, said they are committed to helping both banks and nonbanks transition affected consumers from USD LIBOR in a transparent and orderly manner.

NCUA Publishes Letter

NCUA noted additional guidance on LIBOR Transition Plans can be found in the May 2021 Letter to Credit Unions 21-CU-03, LIBOR Transition.

For its part, the CFPB noted that in October 2019 and December 2021, the CFPB published blog posts discussing the transition away from USD LIBOR to help consumers understand this market-wide change. In June 2020, the CFPB released an updated Consumer Handbook on Adjustable-Rate Mortgages to help consumers better understand these products and how their payments can change over time.

Additional Reminders

In addition, on Dec. 7, 2021, the CFPB reminded it finalized a rule revising Regulation Z (Truth in Lending Act) to facilitate the transition away from the USD LIBOR interest rate index for consumer loans. The rule establishes requirements for how creditors must select replacement indices for existing USD LIBOR-linked consumer loans after April 1, 2022. 

The CFPB also said it is currently assessing any further steps it needs to take as a result of the subsequent Adjustable Interest Rate Act and the Federal Reserve Board’s implementing regulation identifying benchmark rates based on the Secured Overnight Financing Rate (SOFR) to replace USD LIBOR in certain consumer contracts.

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Update: First Responder Credit Unions Academy (FRCUA) Udates

In an ongoing effort to keep your FRCUA education current, modules are continually updated to reflect current NCUA and other regulatory agency requirements. As an example, BSA 26 now includes  Artificial Intelligence and BSA,  Elder Financial Exploitation,  Pig Butchering & BSA, and Executive Order –  Free and Fair Banking.
Post a Comment
Read Complete Article HERE>»

Mortgage Rates Tick Down

MCLEAN, Va.--Mortgage rates moved slightly lower this week, with the 30-year fixed-rate mortgage averaging 6.56%, Freddie Mac reported. “Mortgage rates are at a 10-month low,” said Sam Khater, Freddie Mac’s chief economist. “Purchase demand continues to rise on the back of lower rates and solid economic growth. Though many potential homebuyers still face affordability challenges, consistently lower rates may provide them with the impetus to enter the market.” The 30-year FRM averaged 6.56% as of Aug. 28, down from last week when it averaged 6.58%. A year ago at this time, the 30-year FRM averaged 6.35%. The 15-year FRM averaged 5.69%, unchanged from last week. A year ago at this time, the 15-year FRM averaged 5.51%, Freddie Mac said. ____________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

SIGN UP FOR YOUR CUSTOM HEALTH INSURANCE SOLUTION TODAY

 https://bizu65.allstatehealth.com/?password=demo ____________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

Wendelville Fire Chief Andrew Pilecki re-elected to FASNY board

Andrew Pilecki, the current fire chief of Wendelville Volunteer Fire Company, has been re-elected to the board of directors of the Firefighters Association of the State of New York. Pilecki has been a member of the fire service for more than four decades, including the past 22 years as a responder with the Wendelville company. Previously he was an active member of Columbia Hook and Ladder Co. He’s also a former assistant director of emergency management for the City of North Tonawanda. FASNY directors serve five-year terms of office. During his first term, Pilecki was instrumental in supporting the association’s pandemic response, championed fire company recruitment and retention efforts, and worked to amplify the needs of Western New York’s volunteer fire service at the state level, according to FASNY. “I’m honored to be re-elected and to continue advocating for the men and women who volunteer their time, risk their safety and serve their communities across the state,” Pilecki said. “...
Post a Comment
Read Complete Article HERE>»

Many CUs Likely to Face New Operating Challenges "Michael Moebs"

04/08/2024 09:04 pm By Ray Birch LAKE FOREST, Ill.—The trend lines don’t lie: Financial institutions charging high overdraft fees will likely face operating challenges in the near future and may even be forced to merge if they don’t follow the market trend of lowering their OD charge. Michael Moebs, economist and chairman of Moebs $ervices, is offering that forecast following his company’s new overdraft study, which has found overall net OD revenue for 2023 was down 5.7%, with banks dipping by 8.1% to $31.4 billion, thrifts falling by 28.6%. and credit unions actually increasing net revenue 2.2%. The study further reveals the m...
Post a Comment
Read Complete Article HERE>»