The NCUA board of directors approved two items at its first meeting of 2023 on Thursday:
- an extension of the 18% federal credit union loan interest rate; and
- the agency’s 2023 Annual Performance Plan.
18% interest rate ceiling
Consistent with the requirements of the Federal Credit Union Act, the board unanimously approved maintaining the current 18% interest rate ceiling for loans made by federal credit unions for a new 18-month period from March 11, 2023, through Sept. 10, 2024.
An NCUA staff analysis concluded that money market rates have risen over the preceding six-month period and that lowering the rate ceiling below the current 18% maximum would threaten the safety and soundness of individual credit unions due to anticipated adverse effects on liquidity, capital, earnings, and growth. The Federal Credit Union Act requires both those conditions to exist for the Board to approve an interest rate ceiling higher than 15%.
Annual Performance Plan
The board’s unanimously approved 2023 Annual Performance Plan provides specific direction and guidance toward achieving the mission and the strategic goals and objectives outlined in the agency’s 2022–2026 Strategic Plan.
“This year, the NCUA will pay particular attention to liquidity risk, interest rate risk, and credit risk, as noted in the agency’s recently announced 2023 supervisory priorities,” said Todd Harper, NCUA chairman. “And, the agency will once again focus on ever-present cybersecurity threats, not only within credit unions but also within the broader financial system. The implementation of this plan will contribute to our success in addressing these risks.”
The NCUA board of directors’ next meeting is Feb. 16 at 10 a.m. and will be livestreamed on the NCUA website.