The NCUA has approved an extension of the temporary 18% interest rate ceiling on loans made by federal credit unions, keeping the higher cap in place through Sept. 10, 2027, the agency announced.
In a letter to federally chartered credit unions, NCUA Chairman Kyle Hauptman said the Board acted under authority granted by the Federal Credit Union Act, which allows the agency to temporarily raise the statutory 15% loan rate ceiling after reviewing specified economic and safety-and-soundness criteria. The current 18% ceiling had been set to expire on March 10, 2026.
The decision will preserve credit unions' flexibility to price loans for higher-risk borrowers and maintain access to credit during a period of elevated funding costs and ongoing balance-sheet pressure. It also ensures continuity for the agency's Payday Alternative Loan (PAL) programs. Under existing regulations, federal credit unions may continue to charge up to 28% APR on PAL loans, subject to program requirements.
The extension followed a recent request from the Defense Credit Union Council (DCUC), which urged the Board to maintain the 18% cap, warning that a reversion to 15% could restrict credit availability for members with modest means or limited credit histories and weaken PALs as a consumer-friendly alternative to payday lenders.
After the NCUA's announcement, DCUC Chief Advocacy Officer Jason Stverak said, "This action reflects a clear understanding of today's interest-rate environment and the importance of preserving credit unions' ability to safely and responsibly meet the credit needs of their members."
He added, "Most credit unions price loans well below the 18% ceiling; however, retaining this flexibility is critical to ensuring credit unions can continue serving higher-risk and underserved borrowers without compromising safety and soundness or pushing members toward predatory lenders and less regulated alternatives."
The 18% ceiling has been in place continuously since 1987 and has been renewed repeatedly by successive NCUA boards. In extending the cap again, the Board reaffirmed its view that temporary flexibility above the statutory baseline remains appropriate under current economic conditions.
America's Credit Unions President/CEO Scott Simpson said, "The NCUA has maintained this ceiling for decades, recognizing that allowing the cap to revert back to 15% would not lower costs for consumers. Rather, it would restrict access to credit, particularly for working families who rely on credit unions for safe, fairly priced loans."
The NCUA's action will apply only to federal credit unions. State-chartered institutions remain subject to applicable state law. Questions regarding the extension should be directed to regional NCUA offices, the agency said.
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