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Permissible Loan Interest Rate Ceiling Extended

21-FCU-04 / August 2021
Permissible Loan Interest Rate Ceiling Extended
Federal Credit Unions
Consumer Lending
Federal Credit Unions
Permissible Loan Interest Rate Ceiling Extended

Dear Boards of Directors and Chief Executive Officers:

This letter communicates the NCUA Board’s decision to continue the current 18 percent interest rate ceiling for loans made by federal credit unions, based on the authorities established by the Federal Credit Union Act. The Board approved the 18 percent rate at its June 24, 2021, open meeting.

Although the Federal Credit Union Act generally limits federal credit unions to a 15 percent interest rate ceiling on loans, it provides the NCUA Board flexibility to establish a higher rate for up to 18 months after considering certain statutory criteria.1 The June 24, 2021, NCUA Board action extends the 18 percent ceiling through March 10, 2023. The previous 18 percent rate ceiling expires on September 10, 2021.

The Board’s decision preserves your federal credit union’s ability to offer a higher rate payday alternative loan. You may still charge up to 28 percent on payday alternative loans under the terms and conditions specified in NCUA’s regulations.2

If you have any questions, please contact your regional office.



Todd M. Harper


1 12 U.S.C. §1757(5)(A)(vi)(I).

2 12 C.F.R. §701.21(c)(7)(iii).

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