The National Credit Union Administration (NCUA) has issued guidance indicating that eligible federal credit unions (FCUs) can begin taking advantage of new board meeting flexibility enacted through the Credit Union Board Modernization Act (CUBMA) without waiting for the agency to update its Federal Credit Union Bylaws.
Under CUBMA, FCUs are no longer subject to a uniform monthly board meeting requirement. De novo FCUs (those in their first five years of operation) must continue to meet monthly. An FCU with a composite CAMELS rating of 1 or 2 and a corresponding management rating of 1 or 2 may meet six times annually, provided it meets at least once during each fiscal quarter. FCUs with a composite CAMELS rating of 3, 4, or 5, or a management rating of 3, 4, or 5, remain subject to monthly meetings.
Eligible FCUs that want to move from monthly board meetings to a six-meeting schedule must first amend their bylaws. Article VI, Section 5 of the current Federal Credit Union Bylaws requires the board to meet at least once each month. As a result, an FCU must amend its own bylaws before it can reduce the number of required board meetings.
Bylaw amendments have traditionally required NCUA approval. However, the statutory changes under CUBMA are self-executing. The NCUA has clarified that eligible FCUs do not need to wait for the agency to complete its rulemaking to the Federal Credit Union Bylaws or obtain NCUA approval before making the change. Once an eligible FCU amends its bylaws, it may begin using the six-meeting schedule.
Eligibility also depends on supervisory ratings and may change following a subsequent examination. An FCU that qualifies for the six-meeting schedule would be required to resume monthly meetings if either its composite CAMELS rating or management rating is assigned a 3, 4, or 5. Boards should account for that possibility when establishing their annual meeting calendar.
For eligible FCUs, the new law provides an opportunity to determine whether six board meetings a year better fits the credit union’s governance needs. The law does not require a qualifying FCU to reduce its meetings; boards may continue meeting more frequently if they determine that is appropriate.
FCUs with questions about implementing the new requirements may contact the NCUA’s Office of Credit Union Resources and Expansion at 703.518.6610 or CUREMail@ncua.gov.
California’s Credit Unions and Nevada’s Credit Unions are proud to have worked on this initiative for several legislative sessions. The nexus for this regulatory relief bill stems from a conversation with Shapiro credit unions in California.
The bill was first introduced in the House by California Congressman Juan Vargas in 2022, and advanced through the House and Senate through leadership from local credit unions, the California league’s advocacy team, and America’s Credit Unions.
California’s Credit Unions and Nevada’s Credit Unions will continue to follow developments as the NCUA works toward conforming revisions to its regulations and Federal Credit Union Bylaws.
For more information, email Lisa Quaranta.
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Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!
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For more information, email Lisa Quaranta.
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