§5805 Benchmark for Loans

Summary

Banks may pick any benchmark rate they think is right for loans that do not use LIBOR, even if the rate is not SOFR, for loans made before, on, or after March 15, 2022. The chosen rate must fit the bank’s funding, customers, products, risk profile, risk-management, and operations, and it must follow the loan contract and the law. A federal supervisory agency cannot take enforcement or supervisory action against a bank just because the bank used a benchmark that is not SOFR. Bank: an institution examined by a federal banking regulator. Covered action: an enforcement step (like a cease-and-desist order) or supervisory findings from a review (such as matters requiring attention or board attention). Federal financial institutions regulatory agencies: agencies named in section 3302. Federal supervisory agency: agencies listed in section 3401(7)(A)–(H). Non-IBOR loan: a loan that does not use LIBOR, any former non-U.S. dollar LIBOR rates administered by ICE Benchmark Administration Limited (or its predecessor or successor), or other interbank offered rates expected to stop.