ARLINGTON, Va. — In what has become a familiar exercise, NAFCU has once again written to the NCUA Board, urging that the agency keep the 18% ceiling on credit union interest rates.
Each year the agency may hike the maximum interest rate that CUs can charge above the 15% set in statute, but only for 18 months at a time. The current 18% cap expires in early March 2008.
"NAFCU believes that lowering the interest rate will be very detrimental to the safety and soundness of credit unions because of potential loss of capital," the association wrote in its Jan. 9 letter. "Further, it could discourage federal credit unions from making higher risk loans, leaving some credit union members or potential members, including the underserved, with the alternative of obtaining these loans from lenders at much higher rates."
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