"6 - 12 month term" is a trigger term but I/O payments is not. If you have friendly relations with the competitor, make a courtesy call to your peer. Say that your lenders want to file a formal complaint with your competitor's regulator if you won't let them do the same thing. If you don't have friendly relations, skip the courtesy call and go directly to the formal complaint.
I used to help my marketing director do this when competitors got over the line. He loved to play hardball. I drafted the letters for his signature & it always put a smile on his face to rat out the competitors. From that point on, the relationship between the marketing and compliance depts. improved considerably.