The Consumer Financial Protection Bureau (CFPB) Tuesday finalized a rule facilitating the transition away from the LIBOR interest rate index for consumer financial products. The rule establishes requirements for how creditors must select replacement indices for existing LIBOR-linked consumer loans after April 1, 2022.

No new financial contracts may reference LIBOR as the relevant index after the end of 2021. Starting in June 2023, LIBOR can no longer be used for existing financial contracts.

The transition away from LIBOR was set into motion after a criminal rate-setting conspiracy implicated large international banks and undermined public confidence in the index.

Approximately $1.4 trillion of consumer loans are estimated to be currently tied to LIBOR.

The CFPB also issued an updated set of Frequently Asked Questions to help creditors address other LIBOR transition topics, regulatory questions, and general implementation considerations.