The NCUA board has approved a plan to continue the agency's
temporary 18% rate ceiling for most loans made by federal credit
unions.
Section 107(5)(A)(vi)(I) of the Federal Credit Union Act, 12
U.S.C. 1757(5)(A)(vi)(I), limits federal credit unions to a 15%
interest rate ceiling on loans but authorizes the NCUA board to
increase rates for up to 18 months after certain required
consultations and if certain conditions are met.
One condition of raising the rate ceiling is that money market
interest rates must have increased during the preceding six months.
NCUA staff concluded that was the case, because
there were several occasions during that period when money market
rates had risen, and also concluded that certain safety and
soundness conditions had been met.
