The CFPB recently published a blog post to advise consumers that LIBOR is expected be eliminated sometime after 2021 and that the change will effect some adjustable-rate loans and lines of credit.
In 2017, the United Kingdom’s Financial Conduct Authority (the regulator that oversees the LIBOR panel) announced that it would discontinue the index. As we reported, earlier this year the Federal Reserve Bank of New York began publishing a new index named the Secured Overnight Financing Rate (SOFR). The CFPB’s blog post indicates that the working group convened by the Federal Reserve Board to address the transition from LIBOR has recommended the use of SOFR to take the place of LIBOR.
Creditors currently using LIBOR are advised to consult with counsel as to how best to proceed in replacing LIBOR in their agreements.