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The National Credit Union Administration (NCUA) issued new guidance clarifying how federal credit unions can begin taking advantage of recently enacted changes to board meeting requirements under the Credit Union Board Modernization Act.
The law, enacted in July as part of the 21st Century ROAD to Housing Act, replaces the longstanding requirement that all federal credit union boards meet monthly. Under the new framework, federal credit unions with composite CAMELS ratings of 1 or 2 and management ratings of 1 or 2 may reduce their board meeting schedule to six meetings per year, provided they continue to meet at least once during each fiscal quarter. Newly chartered federal credit unions in their first five years, as well as federal credit unions with a composite or management rating of 3, 4, or 5, must continue meeting monthly.
Importantly, NCUA has confirmed that eligible credit unions do not need to wait for the agency to formally update its regulations or model bylaws before making the change. Because the statutory changes are self-executing, a qualifying federal credit union may amend its own bylaws and begin using the reduced meeting schedule immediately without submitting the amendment to NCUA for approval.
Credit unions should note, however, that the bylaw amendment must occur before reducing meeting frequency. Eligible federal credit unions should also account for the possibility that a future change in supervisory ratings could require a return to monthly meetings.
NCUA is expected to make conforming regulatory and model bylaw changes in the future. The League will continue to monitor implementation guidance from NCUA, as well as America’s Credit Unions.