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
Operational efficiencies focus of new @CUNA program #NewsNow http://t.co/qBYHKVYeQN
14 minutes ago
.@mncreditunions collects 600 stories of #WhyILoveMyCU http://t.co/aaVMQEioq4
45 minutes ago
.@NJCUL encourages #creditunions to join the #Movember2014 movement.
1 hours ago
.@USATODAYmoney @fileneresearch pre-retirement capability study http://t.co/xvXqwKEbjj. See #NewsNow for report recap http://t.co/pUXrSQFlju
2 hours ago
.@fairwindscu @UCF neck and neck in @OBJUpdate #BrandMadness http://t.co/D8YrKamEX7
3 hours ago