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July 15, 2019
David Burkholder and Sophie Cuthbertson comment on the Alternative Reference Rates Committee’s approach to setting guidelines for consumer loans in its latest efforts to prepare capital markets for the end of Libor.
Excerpts from “ARRC Sets Sights on Libor Fallbacks for Consumer Loans,” GlobalCapital, July 15, 2019:
“We’re dealing with every day people here,” said Sophie Cuthbertson, partner at Cadwalader. “For example, one thing [the ARRC is] taking into consideration is consumer protection laws. Another thing they noted is that it might be difficult for certain consumer products to allow for amendments to existing retail documents.”
“If you asked an institution nine months ago, ‘what are you guys doing with Libor transition,’ the answer more often than not would’ve been, ‘we’re trying to figure it out,’” said David Burkholder, partner at Cadwalader. “I think now, everybody acknowledges we are all going to end up at the same place, where Libor is no longer there. It’s much easier as an industry to get there if we’re also starting from the same place with consistent language.”