Why Doesn NatLUST Quote a Specific Interest Rate?
The nature of NatLUST’s mission is fundamentally different than a bank. We function not as a for profit company, but as a servant of the state. If we were to quote a specific interest rate, we would have to set it at a level that in all likelihood would cause us to make a profit, which isn’t our objective. Instead, we continually adjust our carrying costs so that the program operates on a break even basis. For example, as the program expands, our fixed costs will be spread over more claims, which should make the program even more attractive. For transparency, we post our historical carrying costs to the web each month so that participants can make informed judgments on whether to use the program. Prospective Illinois participants are encouraged to look at the historical carrying costs for Virginia and Illinois.
