Bank Regulators Remind Firms to Complete LIBOR Transition Efforts

Bank regulators reminded firms that USD LIBOR will cease on June 30, 2023, and that firms should act quickly to complete transition efforts.

In a joint statement, the Federal Reserve Board, CFPB, FDIC, NCUA and OCC, along with the state bank and state credit union regulators, reminded supervised institutions that (i) USD LIBOR panels end on June 30, 2023 and (ii) entities with USD LIBOR exposure should finalize transition of remaining LIBOR contracts "as soon as practicable."

The agencies urged firms to ensure replacement rates are negotiated where needed in advance of LIBOR cessation and to "work expeditiously with their customers and coordinate with other institutions as needed in these efforts." Additionally, the agencies reminded firms of actions taken by Congress under the the Adjustable Interest Rate (LIBOR) Act (see related coverage) and related FRB actions taken thereunder, i.e., the adoption of Regulation ZZ (see related coverage).

The agencies said that examiners will continue monitoring efforts through 2023 and that institutions are expected to conduct the necessary due diligence to "ensure that alternative rate selections are appropriate for the institution's products, risk profile, risk management capabilities, customer and funding needs, and operational capabilities."