Reg Agenda: NCUA May Consider Changing Interest Rate Ceiling


Read more at the Washington Credit Union Daily

The National Credit Union Administration board may issue an advance notice of proposed rulemaking to solicit comments on changes to the interest rate ceiling for loans made by credit unions in the coming months, according to the Spring version of the federal regulatory agenda that was released Friday.

The board may ask for comments on the impact of the statutory interest rate ceiling imposed by federal law and the methodology the agency should use to set variable or floating interest rates.

The announcement, which came in the regulatory agenda released by all federal agencies, is not the first time the agency has said it may consider changes to the interest rate methodology. While the agenda lists a possible month for the board to issue proposed or final rules, agency officials have said in the past that such deadlines merely are placeholders and do not indicate a specific date for a rule to be issued.

The agenda also lists a proposed rule the board may consider to “modernize and improve” the NCUA’s investment rules “that are overly restrictive and unnecessary from a safety and soundness perspective.” The agenda does not provide additional details of the proposal, but it does state that it would “provide federal credit unions with more flexible investment options.”

The agenda also states that the board may consider:

  • Revisions to its regulation prohibiting federally insured credit unions from making golden parachute and indemnification payments to an institution-related party. The proposal would include a section on merger-related financial arrangements.
  • Changes to the capital adequacy rules for credit unions that will “integrate an analog” to the community banks leverage ratio. In November 2019 other banking regulators issued a final rule providing qualifying community banks with the option to use a simplified measure of capital adequacy.
  • Changes to its overdraft rule. The board adopted a proposed rule governing overdrafts when Republicans controlled the NCUA board last year. That proposal changed the 45-day limit within which a member must rectify an overdraft to a more flexible approach. The board has been evaluating comments on the proposal, which Chairman Todd Harper originally opposed.
  • Adopting a rule that would allow the inclusion of any shared branch, shared ATM or electronic facility for Multiple Common Bond federal credit unions that participate in a shared branching network. Harper also opposed that proposal.
  • A rule that would permit federal credit unions to purchase mortgage servicing rights from other federal credit unions. Harper opposed that plan.


  • David Baumann

    David Baumann established and edited the Washington Credit Union Daily website before it was put on hiatus while he served as the editor of the regulatory and legislative blog at CUCollaborate. Before starting Washington Credit Union Daily, David was the Washington correspondent for the Credit Union Times. A veteran Washington reporter, he has spent his career writing and editing for many of the capital’s leading publications, including CongressDaily, National Journal magazine and Congressional Quarterly Weekly. He was part of a team that won a 2005 National Headliner Award for a special issue of National Journal on “The State of Congress.” He holds a B.A. in political science from The George Washington University and an M.A. in journalism from Indiana University.

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