Dear Boards of Directors and Chief Executive Officers:
As a follow-up to Letter to Credit Unions 21-CU-03, LIBOR Transition, this letter provides additional reminders related to LIBOR’s discontinuance.
Five federal financial institution regulatory agencies, in conjunction with the state bank and state credit union regulators, are jointly issuing the enclosed statement to emphasize the expectation that supervised institutions with LIBOR exposure will continue to progress toward an orderly transition away from LIBOR.1 The NCUA encourages all federally insured credit unions to transition away from using U.S. dollar LIBOR as a reference rate as soon as possible, but no later than December 31, 2021, and to ensure existing contracts have robust fallback language that includes a clearly defined alternative reference rate.
Please contact your NCUA Regional Office or state supervisory authority if you have any questions about this important topic.
Todd M. Harper
1 The agencies are the Board of Governors of the Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), and the Consumer Financial Protection Bureau (CFPB).