Q: What if the HELOC contract does not allow index replacement until LIBOR is no longer available?
A: As discussed above in LIBOR Home Equity Line of Credit FAQ 5, a creditor may only replace the index on a HELOC account if certain conditions are met. Relevant to the LIBOR transition, two options for replacing the index for a HELOC are: 1) when LIBOR is no longer available (Unavailable Provision) or 2) on or after April 1, 2022, (LIBOR-Specific Provision). Contractual language may limit which option in Regulation Z a creditor may use, and which replacement indices may be selected. Contractual language may also require a creditor to wait until LIBOR is no longer available before it replaces the index. Comment 40(f)(3)(ii)-1. For example, certain reverse mortgage contracts limit the creditor’s ability to change the index and the options for replacement indices.