During its first open meeting of 2023, the National Credit Union Administration (NCUA) Board extended the 18-percent federal credit union loan interest rate ceiling and approved the Annual Performance Plan.
The extension is through Sept. 10, 2024 – with NCUA Board Chairman Todd M. Harper maintaining that adjusting the maximum loan rate higher would place additional burdens on credit union member budgets already stressed by inflation and tighter credit conditions.
“The credit union system’s statutory mission is to support the saving and credit needs of all Americans, especially people of modest means, so that is yet another reason why the maximum interest rate on loans should not be raised at this time,” Harper said. “Keeping in place the current maximum interest rate on federal credit union loans for another 18 months is prudent and grounded in sound reasoning.”
Per the NCUA, the 18-percent cap applies to all federal credit union lending, except originations made under NCUA’s payday alternative loan program, which are capped at 28 percent.
The NCUA’s 2023 Annual Performance Plan provides specific direction and guidance regarding the mission, strategic goals, and objectives outlined in the agency’s 2022–2026 Strategic Plan.
“This year, the NCUA will pay particular attention to liquidity risk, interest rate risk, and credit risk, as noted in the agency’s recently announced 2023 supervisory priorities,” Harper said. “And, the agency will once again focus on ever-present cybersecurity threats, not only within credit unions but also within the broader financial system. The implementation of this plan will contribute to our success in addressing these risks.”