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NAFCU's latest Economic & CU Monitor – now available for download – examines survey respondents’ insights on a variety of credit union hot topics, including lending and the current interest rate ceiling, which the NCUA voted to keep at 18 percent for another 18 months during the agency’s first board meeting of the year. 

Nearly one in three survey respondents indicated that the current interest rate ceiling had constrained their credit union’s lending activity. Credit card loans were identified as the most impacted, followed by personal loans, other unsecured loans, and auto loans.

A strong majority of survey respondents (88 percent) favored NAFCU’s call for the NCUA to establish a floating permissible interest rate ceiling to address constraints of the 15 percent ceiling set by the Federal Credit Union Act. 

Nearly half of the respondents (48 percent) indicated that changing lending conditions had prompted their credit union to reconsider the length of loan terms offered to their members. The survey’s Credit Union Sentiment Index (CUSI) suggested that overall loan demand was relatively subdued in the final quarter of last year but rose in January. 

These findings are consistent with a recent Federal Reserve survey on lending, which found broad weakening of demand in the fourth quarter of 2022. 

The CUSI also indicated that credit union optimism bounced back as growth and earnings improved from the prior month. The regulatory component fell, likely as a reaction to the CFPB’s credit card late fees proposed rule. 

NAFCU has advocated against the rule, outlining concerns to the CFPB and calling on the bureau to convene a Small Business Regulatory Enforcement Fairness Act (SBREFA) to consider the impact of the proposal on small entities.

The association is seeking credit union feedback to compile data on industry late fee practices and the potential impact of the proposal. Credit unions can take the survey to support the association in its advocacy to push back on the bureau’s proposal. The feedback provided by the survey is critical to NAFCU’s efforts to provide a robust response to the proposal.

NAFCU relies on survey responses to provide its members a glimpse of trends affecting the credit union industry and inform the association’s advocacy efforts. Next month’s Economic & CU Monitor survey also covers credit card late fees; responses are due March 1.

For more on NAFCU's award-winning research team, check out the association's Macro Data Flash reports for insights into interest rates, auto sales, the housing market, and more.