These rates will not be published until July 3 , 2023 . Earlier transitions will be through indexes recommended by the ARRC .
The change in index must be communicated and disclosed to customers / members , even if the rate is not increasing or changing . These notifications are mandatory beginning Oct . 1 , 2022 .
The exception for rate reevaluations applicable to credit card accounts is expanded to allow an exception from the requirement for increases that occur due to replacing a LIBOR index . This is only an exception when the transition is completed using the specific provisions from the final rule and the regulations , and do not apply to rate increase reevaluations that were a requirement prior to the transition away from LIBOR .
Closed-End Credit of an ARM , mortgage servicers are generally not required to notify the consumer of a change in the index unless it is not comparable to LIBOR . They may send voluntary notices about the change . However , the servicer needs to notify the customer if there is a change in the interest rate that will impact the monthly payment . This notification must happen between two to seven months in advance , depending on where the consumer is in the loan period .
In the case of student loans , which are obtained through the federal government , as long as the index chosen is substantially similar to LIBOR , notification is not mandatory . If the student loans are private , and not obtained through the federal government , the consumer may have to give consent for an index change , depending on the state laws . Student loan index changes do not have to be communicated to the consumer unless the index is not comparable to LIBOR . •••
For closed-end credit , the final rule states similar parameters to open-ended and follows the specific provisions set forth in the final rules and regulations . However , closed-end credit is different in that changing indexes to a non-comparable index may constitute a refinancing under Regulation Z .
Multiple forms , like H-4 ( D )( 4 ) for example , have updates or changes that will be unique to the situation . Using a different form is acceptable , but only if the form is substantially similar to the form effective on April 1 , 2022 . The older forms , at that point , will still be available to use as examples .
For Consumers
Consumers will likely face a lot of notifications about their loans in the coming months . However , changing indexes does not mean the rate will change .
For most types of loans , including adjustablerate mortgages ( ARMs ), credit cards , HELOCs and student loans , lenders must choose a replacement index substantially similar to LIBOR in historical rate fluctuations . Any other index changes will have to be analyzed and researched to ensure compliance with the final rule .
When a new index is chosen , most lenders will have to notify the consumer of the change , regardless of if the rate changes . Some types of loans , like ARMs or student loans , have slightly different notification rules . In the case
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