The Alternative Reference Rates Committee released survey results that found most respondents indicated they have documented plans in place to remediate USD LIBOR business loans prior to LIBOR’s discontinuation June 30, 2023, though more work remains.

Survey Results: According to the survey, most business loan borrowers indicated they have been contacted by their lenders about transitioning their LIBOR loans, though most syndicated lenders said they had not been contacted by an agent or had received no or few amendments. The ARRC said the results reflect both an awareness of the LIBOR transition and the need to more quickly convert loans given the slowdown in loan refinancing.

Fed Proposal: The Federal Reserve this summer issued a proposed rule to address existing contracts that reference LIBOR but don’t have a replacement benchmark rate, determine replacement rates for contracts lacking fallback language, and provide a safe harbor for contracts that do not specify a non-LIBOR replacement rate.

ICBA Position: In an August comment letter, ICBA urged regulators to work with industry stakeholders to develop resources to help community bankers as they transition from LIBOR. ICBA also reminded the Fed about interbank borrowing rates other than the Secured Overnight Financing Rate that could serve as a viable LIBOR alternative for community banks.