Title 12 — Banks and BankingRelease 119-73

§5805 Benchmark for loans

Title 12 › Chapter CHAPTER 55— - ADJUSTABLE INTEREST RATE (LIBOR) › § 5805

Last updated Apr 6, 2026|Official source

Summary

Banks may use any benchmark they think is right for loans that do not use LIBOR, even if the benchmark is not SOFR. This applies to loans made before, on, or after March 15, 2022. The choice must fit the bank’s funding, customer needs, products, risks, risk controls, and operations, and it must follow the loan terms and the law. Federal supervisors cannot bring enforcement action just because the bank’s benchmark is not SOFR. bank = an institution examined by a federal bank regulator. covered action = enforcement steps or supervisory findings that require attention. Federal financial institutions regulatory agencies = the agencies named in section 3302. Federal supervisory agency = the agencies listed in section 3401(7)(A)-(H). non-IBOR loan = a loan that does not use LIBOR or similar interbank rates expected to stop.

Full Legal Text

Title 12, §5805

Banks and Banking — Source: USLM XML via OLRC

(a)In this section:

(1)The term “bank” means an institution subject to examination by a Federal financial institutions regulatory agency.

(2)The term “covered action” means—

(A)the initiation by a Federal supervisory agency of an enforcement action, including the issuance of a cease-and-desist order; or

(B)the issuance by a Federal supervisory agency of a matter requiring attention, a matter requiring immediate attention; or a matter requiring board attention resulting from a supervisory activity conducted by the Federal supervisory agency.

(3)The term “Federal financial institutions regulatory agencies” has the meaning given the term in section 3302 of this title.

(4)The term “Federal supervisory agency” means an agency listed in subparagraphs (A) through (H) of section 3401(7) of this title.

(5)The term “non-IBOR loan” means any loan that, by its terms, does not use in any way LIBOR, any tenor of non-U.S. dollar currency rates formerly known as the London interbank offered rate as administered by ICE Benchmark Administration Limited (or any predecessor or successor administrator thereof), and any other interbank offered rates that are expected to cease, as a benchmark.

(b)With respect to a benchmark used by a bank—

(1)the bank, in any non-IBOR loan made before, on, or after March 15, 2022, may use any benchmark, including a benchmark that is not SOFR, that the bank determines to be appropriate for the funding model of the bank; the needs of the customers of the bank; and the products, risk profile, risk management capabilities, and operational capabilities of the bank; provided, however, that the use of any benchmark shall remain subject to the terms of the non-IBOR loan, and applicable law; and

(2)no Federal supervisory agency may take any covered action against the bank solely because that benchmark is not SOFR.

Reference

Citations & Metadata

Citation

12 U.S.C. § 5805

Title 12 — Banks and Banking

Last Updated

Apr 6, 2026

Release point: 119-73