CUs Reminded of Libor Transition Deadline

With less than 100 days left before a key deadline, financial institutions are moving away from the world’s most important interest rate more slowly than regulators had hoped.

Despite years of preparation and hand-wringing, many new loans originated by U.S. financial institutions are still using the London interbank offered rate, or Libor, which is being phased out globally after a rate manipulation scandal years ago.

Many FIs have yet to lean into using non-Libor benchmarks — either the one that regulators have implicitly pushed or one of two competing rates that have gained some traction — when making loans. (American Banker, Sept. 28)

The NCUA encourages all federally insured credit unions to transition away from using the U.S. dollar LIBOR settings as soon as possible, but no later than December 31, 2021.