The NCUA board voted Thursday to extend the current 18% maximum loan interest rate for most loans made by federal credit unions. The 18% cap would have expired March 10, but is now in place through Sept. 10, 2018.
The Federal Credit Union Act caps the interest rate on federal credit union loans at 15%, but gives the NCUA board discretion to raise that limit for 18-month periods if interest-rate levels could threaten the safety and soundness of credit unions.
The current 18% ceiling has remained in place since May 1987 and applies to all federal credit union lending except originations made under NCUA’s Payday Alternative Loan program, which are capped at 28%.
NCUA Chief Financial Officer Rendell Jones presented a quarterly update on the National Credit Union Share Insurance Fund at the meeting as well.
The fund’s net position was $12.7 billion at the end of 2016, and it ended 2016 with a 1.24% equity ratio.