Today, the CFPB announced the following on their website:
“The Bureau of Consumer Financial Protection is proposing to amend Regulation Z, which implements the Truth in Lending Act, generally to address the sunset of LIBOR, expected to be discontinued after 2021. The proposal is to facilitate creditors’ transition away from using LIBOR as an index for variable-rate consumer credit products. The Bureau is proposing 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 also is proposing changes to certain open-end provisions restricting index changes, requiring change-in-terms notices, and addressing how credit card rate reevaluation requirements apply.
In addition to this proposed rule, the Bureau issued a set of Frequently Asked Questions (FAQs) to address other LIBOR transition topics and regulatory questions under the existing rule. The FAQs deal with issues related to general implementation considerations, and restate requirements for adjustable-rate mortgage servicing notices, adjustable-rate mortgage and HELOC origination disclosures, and requirements under AMTPA.”
In addition, the CFPB has published a new version of the CHARM booklet (available here: https://www.consumerfinance.gov/policy-compliance/notice-opportunities-comment/open-notices/notice-availability-revised-charm-booklet-publication/).
We are currently reviewing this announcement to determine any impact, and evaluating any modifications, to our document library and/or systems. Any modifications we make as a result will be announced on our website (https://compliance.docutech.com/).