Newsroom

Ahead of today’s Senate Banking Committee hearing to discuss the transition to sunset the London Interbank Offered Rate (LIBOR), NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the Committee to offer support for Congressional action to address the legacy of LIBOR contracts. 

In the letter, Thaler noted that with LIBOR’s forthcoming end this year, credit unions are in the process of transitioning financial products away from the LIBOR index. While NAFCU-member credit unions are no longer originating new loans that use LIBOR as a reference rate, “some credit unions still have a small number of legacy LIBOR contracts in their consumer loan portfolios, some of which do not contain fallback language that would allow for the contract to be amended and continued when LIBOR sunsets,” wrote Thaler. 

NAFCU has been on top of this transition, sharing new information with credit unions on the discontinuation of LIBOR. Last month, the CFPB, NCUA and other financial regulatory agencies issued a statement highlighting the risks of sunsetting LIBOR; a detailed look at the statement can be found here. 

The association will monitor today’s hearing and share key takeaways to ensure a smooth transition for credit unions. Read the full letter here.