On February 6, the NCUA announced that it issued a letter extending the temporary 18-percent interest rate ceiling for loans made by federal credit unions through September 10, 2027, after determining that money market interest rates had risen over the preceding six months and that prevailing rates threatened the safety and soundness of individual credit unions based on “adverse trends in liquidity, capital, earnings, and growth.” The Federal Credit Union Act generally limits federal credit unions to a 15-percent interest rate ceiling but allows the NCUA to establish a higher rate for up to 18 months if statutory criteria are met. The NCUA also preserved the ability of federal credit unions to offer payday alternative loans at rates up to 28 percent under its regulations. The NCUA stated it would continue monitoring market rates and credit union financial conditions to ensure stability.
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