The federal interest rate ceiling for loans by federal credit unions will remain at 18% under action last week by the National Credit Union Administration (NCUA) Board, the agency said.
The board – which now consists solely of Republican Kyle Hauptman, the board chairman – approved an 18-month extension of the rate ceiling. Without that action, the rate cap would revert to 15% next month under the Federal Credit Union (FCU) Act.
“The Board’s decision also preserves your federal credit union’s ability to offer a higher rate payday alternative loan. You may still charge up to 28 percent on payday alternative loans under the terms and conditions specified in NCUA’s regulations,” the agency said in a recent Letter to Federal Credit Unions.
The FCU Act generally limits the interest rate charged on federal credit union loans to 15%, but it permits the NCUA Board to set a temporary, higher rate for up to 18 months “if it determines that money market interest rates have risen over the preceding six-month period and that the prevailing interest rate levels threaten the safety and soundness of individual credit unions.” The agency said it determined the statutory criteria have been met for the board to establish a rate ceiling higher than 15%.
The agency board last acted on the FCU loan rate ceiling in 2024, extending the temporary 18% ceiling through this March 10.
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