Going Through Changes: Transitioning to a LIBOR-less World for Consumer Loans

It is widely anticipated that the London Interbank Offered Rate (“LIBOR”) will be discontinued in 2021. As LIBOR commonly is used as an index rate for both residential mortgage and consumer loans, its discontinuance has the potential to have a significant impact on lenders, servicers, and consumers. In this Legal Update, we discuss the legal and regulatory issues that industry participants, regulators, and courts will face in order to navigate the transition away from LIBOR, both with respect to new originations and legacy loans. Topics include the implementation of the newly created Secured Overnight Financing Rate and the request by the New York Department of Financial Services for regulated entities’ transition plans.