WASHINGTON—NAFCU told the Fed it supports for implementation of the Adjustable Interest Rate (LIBOR) Act, but it also wants the Fed to be aware of “the impacts that complex or costly regulations will have on credit unions.”
The LIBOR Act is designed to provide “clear” guidance and a consistent federal standard for contracts with interest rates transitioning away from the London Interbank Offered Rate (LIBOR) index for financial products.
“NAFCU supports the board’s decision to use (Secured Overnight Financing Rate—SOFR)-based benchmark replacement rates and appreciate the continuity of contract and litigation safe-harbor that this proposed regulation provides,” wrote Regulatory Affairs Counsel James Akin.
“NAFCU asks that the Board work to reduce costs and complexity associated with implementation of these regulations and minimize any mismatch between the Board-selected replacement rates.”
Akin also requested the Fed consider a large range of alternative rates to best accommodate individual credit unions that need the safe harbor granted by the LIBOR Act and want to guard against asset-liability mismatches.
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