John Zasada, Compliance Consulting Director, Financial Institutions Group

On May 17, 2021, the National Credit Union Administration (NCUA) issued Letter to Credit Unions 21-CU-03 regarding the London Inter-bank Offered Rate (LIBOR) transition.

Starting Dec. 31, 2021, one-week and two-month LIBOR settings will no longer be published. All of the other LIBOR settings will no longer be published beginning on June 30, 2023. The extension to June 30, 2023, allows for legacy LIBOR contracts to mature without credit unions generally needing to act. However, the NCUA stresses the extended deadline should not be construed as an opportunity to continue using the LIBOR. Instead, the NCUA encourages credit unions to transition away from LIBOR as soon as possible. Credit unions have the option of using a reference rate other than the LIBOR or using fallback language that includes a clearly defined alternative reference rate after LIBOR is discontinued.

To understand how this may impact your credit union, contact Doeren Mayhew’s regulatory compliance specialists today.