IntercontinentalExchange (ICE +0.7%) took over administering Libor this year and on July 1 introduced licensing agreements, including a usage license ranging from $8K-$40K per year. Previously, Libor was free except for companies wanting to redistribute the rates.
“There’ve been a number of banks saying they may stop using Libor,” says teh ABA's Denyette DePierro. “Everybody’s kind of waiting to see what ICE is going to do, and, from a cost-benefit perspective, do you continue with Libor or not?”
The new fees could affect many of the nearly 7K banks and 800 firms managing registered investment funds in the U.S., but banks which contribute Libor rates to ICE - including JPMorgan, Bank of America, and Barclays - won't be charged.
The Mortgage Bankers Association has let its concerns be heard, and ICE - while calling the fees "modest" says it's listening to a point. "There has been a lot of criticism by people that they wanted Libor to be better, but then when they’re asked to pay for it, they’re surprised. It shouldn’t be a surprise," says ICE chief Jeff Sprecher.