Today, the Consumer Financial Protection Bureau issued a proposed rule to amend Regulation Z to address the sunset of the London Interbank Offered Rate (LIBOR), and to facilitate creditors’ transition away from using LIBOR as an index for variable-rate consumer products.
“NRMLA still needs the Department of Housing and Urban Development to weigh in on the LIBOR transition,” said NRMLA President Steve irwin, “but we will also need to pay attention to CFPB rules on this transition as well.”
The CFPB proposed changes to certain open-end and closed-end provisions to provide examples of replacement indices for LIBOR indices that meet certain Regulation Z standards. The Bureau proposed further changes to certain open-end provisions restricting index changes, requiring change-in-terms notices, and addressing how credit card rate reevaluation requirements apply. To help the public understand these proposed revisions, the Bureau released a Fast Facts high-level summary and an unofficial redline.
Comments on the proposed rule are due August 4, 2020.
The Bureau announced the availability of an updated consumer publication, the Consumer Handbook on Adjustable Rate Mortgages (CHARM), that aligns with the Bureau’s educational efforts, to be more concise, and to improve readability and usability.