ALEXANDRIA, Va.–The NCUA board has approved an adjustment to agency’s civil money penalties for inflation, increasing the maximum levels of fines it can assess, while leaving the loan interest rate cap untouched.
On civil money penalties, NCUA staff clarified the agency is not required to levy the maximum assessment and can make adjustments for mitigating factors. Indeed, during 2018, the average civil money penalty assessed was $385, agency staff said.
The change is required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. All federal agencies must make annual adjustments and publish them in the Federal Register each year.
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Loan Interest Rate Ceiling
Separately, the board voted in favor of the loan interest rate ceiling at 18%. Staff told the board it leaves sufficient room for pricing but remains below what other agencies permit.
NCUA staff said during a presentation to the board that unsecured loans at credit unions have increased 8% since the rate cap was last adjusted, and that there are more than $17 billion in loans at CUs priced at rates above 15%, primarily credit cards.
Following the NCUA board vote, CUNA issued a statement saying, “While it is critical that the board at least maintain the current cap of 18%, we’re pleased to learn the board will examine the potential benefits that a floating interest rate cap can provide federal credit unions managing risk portfolios.”