The NCUA board on Thursday approved a staffrecommendation to maintain the 18% interest rate ceiling for most loans made by federalcredit unions.

Voting unanimously, the two-member board agreed that loweringthe ceiling would place credit unions at a competitive disadvantage andcould impact the safety and soundness of credit unions.

Loans made under the NCUA's Payday Lending Alternative programwill remain capped at 28%.

Federal law sets the interest rate cap at 15%, but allows theNCUA board to adjust the cap every 18 months. The current interestrate cap has been in effect since 1987.

Board member Rick Metsger pointed out that the board hasincreased the cap every 18 months for the past 40 years.

He added that the board should consider asking Congress toincrease the statutory cap or to give the agency the power toincrease the rate for longer periods of time.

Acting board chairman J. Mark McWatters agreed with Metsger'sanalysis.

Rendell Jones, the agency's chief financial officer, told theboard that at the end of 2016, the share insurance fund balancestood at $12.6 billion

He said that the number of troubled credit unions decreased to196 at the end of the year, compared with 220 at the end of2015.

He told the board that 14 credit unions were the subject ofinvoluntary liquidations or assisted mergers, compared with 16 in2015. Fraud was a contributing factor in 10 of those liquidationsor assisted mergers.