NCUA issues letter on permissible loan interest rate ceiling extension

March 3, 2023

NCUA issued a Letter to Credit Unions (23-FCU-02) noting that the NCUA Board voted to continue the temporary 18% interest rate ceiling for loans made by federal credit unions, January 26, based on the authorities established by the Federal Credit Union Act.

The act generally limits federal credit unions to a 15% interest rate ceiling on loans, but 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 March 10, 2023, the January NCUA Board action extends the temporary 18% interest rate ceiling through Sept. 10, 2024.

The decision preserves a federal credit union’s ability to offer a payday alternative loan with up to 28% under the terms and conditions specified in NCUA’s regulations.