ALEXANDRIA, Va. – NCUA said in a new legal opinion that federal credit unions may add a fixed minimum, or "floor," rate to existing home equity loans as long as the original loan agreement included in writing the possibility of the minimum rate.
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The legal opinion was provided to an attorney whose credit union clients want to add a floor rate to existing, variable-rate, home equity loans. Adding the floor rate would increase the overall interest rate for most of the loans. The credit unions plan to obtain the members’ consent to change the interest rate terms of the loans.
