ALEXANDRIA, Va.-The NCUA Board approved the continuation of the 18% interest rate ceiling for credit union loans and lines of credit effective March 9, 2005 through Sept. 8, 2006. By law, credit unions are permitted to make loans at up to 15% interest, but the agency can up that number if economic conditions warrant after proper consultation with certain congressional committees, Treasury, and the other federal financial institutions regulators. NCUA must also study current money market interest rates and whether prevailing interest rate levels threaten the safety and soundness of individual credit unions demonstrated by adverse trends in growth, liquidity, capital and earnings. NCUA noted that a sampling of 450 (7.79%) federal credit unions showed that the most common rate on unsecured loans was over 15%. "Lowering the interest rate ceiling for federal credit unions would discourage these credit unions from making certain loans and many of the affected members would have no alternative but to turn to other lenders who charge higher rates," the BAM stated. The board may revisit the 18% ceiling at any time necessary. [email protected]