LIBOR CFPB FAQ PSLs 4 – What is required if a refinance of a private student loan is triggered by the LIBOR transition?

Compliance > Regulation Z - TILA > LIBOR Transition
Q:  What is required if a refinance of a private student loan is triggered by the LIBOR transition?
 
A:   As stated above in LIBOR Private Student Loan FAQ 1, under Regulation Z, if the creditor does not select a comparable index during the LIBOR transition when replacing the index of a closed-end loan, the creditor will trigger requirements for a refinance of the transaction. Comment 20(a)-3.ii.B.

If a refinancing occurs, the creditor is required to provide a complete new set of disclosures.  Comment 20(a)-1. For example, for a private education loan, as defined in Regulation Z, 12 CFR § 1026.46(b)(5), the new disclosures required include new approval disclosures and new final disclosures. 12 CFR § 1026.47(b) and (c). For other private student loan products that are not “private education loans” but are otherwise covered by the closed-end loan requirements under Regulation Z, creditors will need to provide the disclosures in Subpart C of Regulation Z. See, e.g., 12 CFR § 1026.18.
 
 
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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