Search
 
Expert Opinion

Raising the Interest Rate Ceiling Would Endanger the Credit Union Difference

For CUs that can’t make a good loan to a subprime borrower under the 18% ceiling, charging more is not the answer.

By Cathie Mahon | April 04, 2023 at 10:00 AM
interest rate adjustment Source: Shutterstock.

Interest rates have risen from the unprecedented lows that followed the 2008 financial crisis and persisted for more than a decade. With this rise, calls have come to increase the credit union interest rate ceiling. Recent industry proposals include a 21% ceiling or a floating ceiling of 15 percentage points above the prime rate.

At Inclusiv, we see things a little differently. As a mission-driven network of community development credit unions (CDCUs), Inclusiv balances a mission of promoting the financial inclusion and well-being of low-income households with supporting the financial sustainability of our network of more than 450 CDCUs. And we vigorously oppose an increase to the 18% interest rate ceiling on both counts. Here’s why:

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

 

Recommended Stories

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2023 ALM Global, LLC. All Rights Reserved.