NCUA Extends 18% Loan Interest Rate Ceiling for Federal Credit Unions

NCUA Letters to Credit Unions

Published February 19th, 2026

Detected March 13th, 2026

Summary

The National Credit Union Administration (NCUA) has extended the temporary 18% interest rate ceiling for loans made by federal credit unions. This extension, approved by the NCUA Board, will now last through September 10, 2027, providing continued flexibility for consumer lending.

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What changed

The National Credit Union Administration (NCUA) has extended the temporary 18% interest rate ceiling for loans made by federal credit unions. This extension, approved by the NCUA Board, will now last through September 10, 2027. The previous ceiling was set to expire on March 10, 2026. Federal credit unions may still charge up to 28% on payday alternative loans under specified conditions.

Federal credit unions should note this extension and ensure their lending practices align with the updated temporary ceiling. This provides continued flexibility for consumer lending, particularly for loans that may exceed the standard 15% statutory limit. No specific compliance deadline is mentioned beyond the effective date of the extension.

What to do next

Ensure loan interest rates for federal credit unions remain at or below the extended 18% ceiling through September 10, 2027, unless specific exceptions apply.
Continue to adhere to the terms and conditions for payday alternative loans, which may carry a rate up to 28%.

Source document (simplified)

Permissible Loan Interest Rate Ceiling Extended

26-FCU-02 / February 2026 Permissible Loan Interest Rate Ceiling Extended To Federal Credit Unions Subject Consumer Lending Status Active To Federal Credit Unions Subj Permissible Loan Interest Rate Ceiling Extended Encl
- Loan Interest rate Ceiling Supplemental Info
Dear Boards of Directors and Chief Executive Officers:

The NCUA Board approved to continue the temporary 18-percent interest rate ceiling for loans made by federal credit unions, based on the authorities established by the Federal Credit Union Act. 1

The Federal Credit Union Act generally limits federal credit unions to a 15-percent interest rate ceiling on loans. However, the NCUA Board may establish a temporary, higher rate for up to 18 months after considering certain statutory criteria. The previously approved 18-percent interest rate ceiling expires on March 10, 2026. The December NCUA Board action extends the temporary 18-percent interest rate ceiling through September 10, 2027

The Board’s decision also preserves your federal credit union’s ability to offer a higher rate payday alternative loan. You may still charge up to 28 percent on payday alternative loans under the terms and conditions specified in NCUA’s regulations. 2

If you have any questions, please do not hesitate to contact your regional office.

Sincerely,

/s/

Kyle Hauptman
Chairman

1 12 U.S.C. §1757(5)(A)(vi)(I).

2 12 C.F.R. §701.21(c)(7)(iii). For more details on the payday alternative loan program, please use the attached link: https://www.federalregister.gov/documents/2010/09/24/2010-23610/short-term-small-amount-loans