Berger, in open letter to Harper, calls for NCUA to raise interest rate ceiling
As the NCUA Board is set to receive a briefing on federal credit unions’ (FCUs) permissible interest rate ceiling during tomorrow’s meeting, NAFCU President and CEO Dan Berger wrote an open letter to Chairman Todd Harper in American Banker detailing the consequences of the current cap.
While the Federal Credit Union Act sets the interest rate ceiling at 15 percent, it provides the NCUA authority to go above that limit, but only in 18-month increments.
“Since 1987, the NCUA has repeatedly voted to raise and maintain the interest rate ceiling at 18% — acknowledging that not doing so would impair the safety and soundness of individual institutions, while also undermining access to affordable credit for low-income and low-credit-score borrowers,” Berger noted. The NCUA most recently approved extending the 18 percent ceiling at its January board meeting.
NAFCU has long called for the NCUA to adopt a floating interest rate ceiling, or at least increase the cap to 21 percent, to ensure credit unions can effectively lend in challenging interest rate environments and remain competitive.
“I urge you to take a look at the real, clear facts in support of doing so,” Berger wrote, providing data and evidence that show it:
- increases access to credit, including for small businesses and disadvantaged consumers;
- protects consumers by giving them a safe, affordable option through credit unions, rather than having to rely on entities that offer predatory loans;
- strengthens the credit union industry through risk-based pricing.
Read Berger’s full letter to Chairman Harper. NAFCU will monitor tomorrow’s NCUA Board meeting and provide credit unions with insights into the discussion afterward. The association will continue to advocate for policies that empower credit unions to meet the needs of their 135 million members.
Growth & Retention
Add to Calendar 2023-09-22 14:00:00 2023-09-22 14:00:00 Understanding Credit Card Portfolio Sales & Agent Programs Both credit union and bank credit card issuers are under intense pressure from various sources, including competitor innovation, significant internal resource commitments, increasing operating expenses, uncertain regulatory and economic environments and a variety of capital and liquidity constraints. This has led to about 80% of all banks offering credit cards under an ‘agent issuing’ model, where a third-party issues credit cards under the financial institution’s name. While hundreds of credit unions do the same, and interest in this option has increased in the last two years, the majority of credit unions still own and manage this product themselves. Deciding whether this option can meet strategic, financial and member needs can be difficult to untangle. In this webinar, Understanding Credit Card Portfolio Sales & Agent Programs, you’ll delve into the structure of such programs, the financial and risk-profile impacts of such a decision, the contractual commitments required of both parties and discover evaluation tips and processes for any credit union that would like to evaluate this path. Key Takeaways Discover the structure of the agent issuing concept and obligations of both parties Understand the financial impact of entering such a program to the balance sheet, income statement, and critical performance ratios Ascertain the impacts to members, including both positive and negative possibilities Review the accompanying contractual structures and key considerations Develop an evaluation process that best protects the credit union’s financial and other outcomes Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until September 22, 2024.Go to the Online Training Center to access the webinar after purchase » Who Should Attend COOs CFOs NCCOs and compliance titles NCRMs and risk titles General counsel staff Education Credits NCCOs will receive 1.0 CEUs for participating in this webinar NCRMs will recieve 1.0 CEUs for participating in this webinar CPA credit information is below; recommended 1.0 CPE credits. CPA Certification Credit Information Reviewer: Josie Collins, Senior Associate Director of Education, NAFCU Learning Objectives: See key takeaways Program Level: Basic Prerequisites Needed: None Advance Preparation Needed: None Delivery Method: Group Internet-Based Recommended CPE Credits: 1.0 credits Recommended Field of Study: Regulatory Ethics – Technical About Our Webinars Our webinars are streamed live from NAFCU headquarters near Washington, DC. Your audio/video feed of the presenters includes presentation slides and downloadable handouts. You can easily submit your questions to the presenters at any time during the live broadcast, with no dialing over the phone! The audio and video stream directly through your computer. Web NAFCU email@example.com America/New_York public
Credits: NCCO, NCRM, CPE
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