NCUA keeps 18% interest rate ceiling, seeks input on longer maturity limits
The NCUA Board on Thursday voted to maintain federal credit unions’ current interest rate ceiling at 18 percent. NAFCU encouraged the board to consider increasing the interest rate ceiling or, absent an increase, keep the rate at 18 percent and explore a floating interest rate ceiling.
“We appreciate NCUA Board Chairman J. Mark McWatters and Board Member Rick Metsger maintaining the current 18 percent interest rate ceiling and inquiring about more flexibility in this area going forward,” said NAFCU President and CEO Dan Berger. “Credit unions exist to provide provident credit to their members. Maintaining the current interest rate cap will ensure the industry is able to compete on a level playing field with other lenders – one of our top priorities.”
The current interest rate ceiling was set to expire Sept. 10. NAFCU has reminded the NCUA Board that it has flexibility in establishing the interest ceiling on loans. Berger has pushed for the board to explore options to modify the interest rate ceiling away from a fixed rate to a “15 percent spread over Prime,” which would help credit unions reduce their interest rate risk and likely lead to an overall increase in lending and access to credit.
continue reading »