Loan Interest Rate Ceiling Extension Going Into Effect

On Jan. 26, the National Credit Union Administration (NCUA) Board voted to continue the temporary 18-percent interest rate ceiling for loans made by federal credit unions, based on the authorities established by the Federal Credit Union Act

The Federal Credit Union Act generally limits federal credit unions to a 15 percent interest rate ceiling on loans. However, the NCUA Board may establish a temporary higher rate for up to 18 months after considering certain statutory criteria.

The previously approved 18-percent interest rate ceiling expires on March 10. The January NCUA Board action extends the temporary 18 percent interest rate ceiling through Sept. 10, 2024.

The board’s decision preserves federal credit unions’ ability to offer a higher-rate payday alternative loan. These credit unions may still charge up to 28 percent on payday alternative loans under the terms and conditions specified in NCUA’s regulations.

You can read more here.