LIBOR CFPB FAQ ARMs 3 – Will the CHARM Booklet be affected by the LIBOR transition?

Compliance > Regulation Z - TILA > LIBOR Transition
Q:  Will the CHARM Booklet be affected by the LIBOR transition?
 
A:   Yes. In addition to the ARM loan program origination disclosure, applicants for ARMs that will be secured by the consumer’s dwelling and have a loan term greater than one year also must receive a booklet titled Consumer Handbook on Adjustable Rate Mortgages (CHARM booklet), or a suitable substitute, generally when the application is provided. 12 CFR § 1026.19(b)(1).

The CHARM booklet was revised to, among other things, remove the historical comparison example that used LIBOR as an index for comparison.

Creditors may, at their option, immediately begin using the revised CHARM booklet, or a suitable substitute, to comply with the requirements in Regulation Z. However, creditors may also use earlier versions of the CHARM booklet until existing supplies are exhausted. When reprinting the CHARM booklet, the most recent version should be used.
 
More information about the updates to the CHARM booklet can be found here. The revised CHARM Booklet is available here.
 
 
This Q&A was created based on information from the Consumer Financial Protection Bureau’s website (which may be updated from time to time) that provides Answers to Frequently Asked Questions on the Transition Away from LIBOR.  This information may be found here:  https://files.consumerfinance.gov/f/documents/cfpb_libor-transition_faqs.pdf
 

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