By John Zasada, JD, CAMS – Shareholder, Financial Institutions Group

On Dec. 16, 2022, the Federal Reserve Board (Fed) issued a 75-page final rule implementing the Adjustable Interest Rate (LIBOR) Act.

LIBOR, formerly known as the London Interbank Offered Rate, was the dominant benchmark rate used in financial contracts for decades. The final rule identifies benchmark rates based on SOFR (Secured Overnight Financing Rate) to replace overnight, one-month, three-month, six-month and 12-month LIBOR in contracts. This includes U.S. contracts that do not mature before LIBOR ends and lack adequate fallback provisions that would replace LIBOR with a practicable replacement benchmark rate. The final rule will be effective 30 days after publication in the Federal Register.

For more information on how this might impact your financial institution, contact Doeren Mayhew today.