Credit Union Board Modernization Act Becomes Law as Part of Federal Housing Bill

On Saturday, July 11, the Credit Union Board Modernization Act became law as a part of the bipartisan 21st Century ROAD to Housing Act after President Trump allowed the legislation to become law without his signature.

The Credit Union Board Modernization Act updates an outdated federal requirement governing meetings of federal credit union boards of directors. The new law allows federal credit unions to hold a minimum of six board meetings per year, provided they meet at least once during each fiscal quarter. Before the passage of this act, federal credit unions were required to meet twelve times a year.

There are two exceptions:

1. De novo credit unions that are less than five years old.
2. Credit unions with a low-soundness rating, indicated by a composite or capability of management rating of 3, 4, or 5.

Credit unions falling under either of these categories must continue to meet twelve times per year.

The legislation does not reduce a board’s fiduciary responsibilities or limit a credit union’s ability to meet more frequently when necessary but gives credit unions more freedom in determining a meeting schedule that best fits their operational needs. Credit unions may continue to hold meetings as often as they deem necessary.

This change only applies to federally chartered credit unions. Credit unions chartered in the state of Maine must continue to adhere to the minimum board meeting requirement of once per month.

The League will continue to monitor implementation and provide updates as additional guidance becomes available.