CFPB Issues LIBOR Transition Rule
The Consumer Finance Protection Bureau issued the LIBOR Transition Rule, which amends Regulation Z to facilitate the LIBOR transition. The LIBOR Transition Rule is generally effective April 1, 2022, although compliance with some provisions is not required until later dates.
With the Rule, the Bureau released an Executive Summary and Unofficial Redline to assist in implementation. The Bureau also updated the LIBOR Transition Frequently Asked Questions (FAQs) to add FAQs related to the final rule provisions and to address questions received by the Bureau.
The Bureau also released PDFs of the Mortgage Servicing ARM Interest Rate Adjustment Sample Forms that were updated by the LIBOR Transition Rule. As noted in the Rule, covered entities may optionally rely on either a form substantially similar to the legacy sample forms or a form substantially similar to the updated sample forms beginning April 1, 2022, through September 30, 2023, to be deemed in compliance with the existing content and format requirements in Regulation Z for the notices. However, beginning on October 1, 2023, these entities may only rely on a form substantially similar to the updated sample forms to be deemed in compliance with the content and format requirements.
You can access the LIBOR Transition Rule, the Executive Summary, the LIBOR Transition FAQs, the Unofficial Redline, and the updated sample forms here: https://www.consumerfinance.gov/compliance/compliance-resources/other-applicable-requirements/libor-index-transition/.
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