Increased FCU loan maturity limits would benefit consumers
Providing NCUA with the flexibility to increase federal credit union loan maturities would provide more opportunities to consumers, including when it comes to affordable education, CUNA wrote to the House Financial Services subcommittee on oversight and investigations Tuesday. CUNA wrote in support of H.R. 1661, which would provide the NCUA board with the flexibility CUNA seeks.
“While most student loans originate with the government, more and more credit unions are finding ways to support student borrowers through private loans. However, one barrier for many federal credit unions from entering the student lending sector is the 15-year loan maturity limit,” the letter reads. “Except for mortgage lending, Federally-chartered credit unions are prohibited by statute from making loans with maturity limits in excess of 15 years…The ability to set a longer loan maturity for Federal credit union loans would provide more opportunities for education that is more affordable.”
Currently, federal credit unions cannot make loans with maturity limits in excess of 15 years. CUNA notes that only one state (Oklahoma) has a similar restriction on state credit unions and no such constraint exists for banks.