Unless you have been under a rock, you are aware LIBOR is going away as an option for loans tied to a fluctuating interest rate.
Effective 10-1-2021, you should have a new index. Things to consider:
There is a notice requirement to borrowers with loans currently tied to LIBOR. I am recommending at least 60 days notice to consumers. The requirement is that they have adequate time to consider the changes and effect of the changes on their loan. While 30 days is sufficient by regulation when adverse action is taken on an account owned by a consumer, the guidance that states they must have adequate time to consider the changes makes this a bit ambiguous. Sixty (60) days should be more than enough notice.
This notice provided must be sufficient for them to understand the changes. So take some time writing your notice, not just a simple, “LIBOR is changing”. I do not believe that would be deemed sufficient by any regulator.
You should have already created a two-fold written plan for the change, and
Prepared a written assessment of the effect on 1- consumers and 2-your organization.
Tip of the day: If you offer ARM loans tied to LIBOR, you may need to reorder your CHARM booklets. They have been updated for the upcoming LIBOR changes.