Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
UK considering raising rate cap on CU loans
LONDON (12/31/12)--The government of the United Kingdom (U.K.) this month started a formal consultation on increasing the maximum interest rate cap for credit union loans to 3% per month from the current 2% per month.

The consultation on the proposals will continue through March 15, and any changes are anticipated to take effect in April 2014 (Mortgage Strategy and Press Association National Newswire Dec. 18).

Under current rules, the 2% limit means credit unions often sustain a loss on smaller shorter-term loans they make because of the high administrative costs, compared with the relative value of the loan, the publications said.

By raising the interest rate credit unions can charge on monthly loans to 3%, credit unions will be able to operate more efficiently, become more stable and make more money available to members, the Economic Secretary to the Treasury, Sajid Javid said.

Credit union loans will remain significantly cheaper--even with the 1% increase--than the alternatives for consumers who often find it hard to procure mainstream sources of finance, Mortgage Strategy said.


RSS print
News Now LiveWire
Leagues have until Friday, April 25, to enter into @CUNA 's Blockbuster Awards. The original deadline was April 18. http://t.co/rnJYm76N8U
12 hours ago
Found out how members are saving at the ballpark with the help of their #creditunions tomorrow in #NewsNow #CUNA
15 hours ago
First annual meeting of @Cornerstone_CUL under way: http://t.co/Xp710hzRC3
16 hours ago
.@fileneresearch says #creditunions can educate young adults in the ways of retirement planning #NewsNow #CUNA http://t.co/vXToTtBVA2
16 hours ago
.@Cornerstone_CUL #credit unions lead the way in 1st QTR auto sales http://t.co/ZiSsE5HIFP
16 hours ago