WASHINGTON -
The trade group told the regulator that any guidelines and training information provided to examiners in this area “should be shared with credit unions as soon as possible.” “Helping members in times of financial difficulties is a hallmark of the credit union system, but credit unions may not be able to assist to the extent they might otherwise if NCUA does not take a proactive role in making sure examiners, as well as credit unions, understand the agencies’ meaning of the workout provisions in the Statement on Subprime Mortgage Lending,” wrote CUNA CEO Dan Mica.
Meanwhile, NAFCU is urging the NCUA board to ensure that the 18% ceiling on loan interest as imposed by the Federal Credit Union Act remain in place.
NAFCU said it believes that lowering the interest rate will be very detrimental to the safety and soundness of credit unions because of potential loss of capital.
“Further, it could discourage federal credit unions from making higher risk loans, leaving some credit union members or potential members, including the underserved, with the alternative of obtaining these loans from lenders at much higher rates,” NAFCU said. “As of Sept. 30, 2007, federally insured credit unions had 1,183,784 loans amounting to $2.26 billion with interest rates above 15%.”
