A Direct Line Blog

By Donya Parrish, MCU VP — Risk Management

You may have read that the 21st Century Road to Housing Act became effective on July 11 without the President’s signature. Did you know the Credit Union Board Modernization Act (CUBMA) was included in it and also became law? The bipartisan legislation had been in the works for a few years and was broadly supported. Now that it is law, we can dive into what it might mean for your credit union.

What are the basics?

The CUBMA amended the Federal Credit Union Act verbiage requiring a monthly board meeting and now requires “a minimum of six board meetings a year.” That limits the change to only federal credit unions.

Meetings must be held each fiscal quarter, and there are restrictions on which credit unions they apply to. It is also an optional change, and one that is not necessarily recommended for credit unions in the middle of a large project, merger, or time of transition.

Who is impacted?

Federal credit unions (FCUs) with a CAMELS rating of 1 or 2 can consider this change in meeting frequency and must also have a capability of management rating of 1 or 2. Any De novo FCUs (during the first five years of existence) and FCUs with CAMELS composite ratings of 3, 4, or 5 or capability of management ratings 3, 4, or 5 must continue to meet monthly.

What about state-chartered credit unions?

State-chartered credit unions are still bound by MCA 32-3-411, which states “either the board of directors or the executive committee shall meet each month.” Revisions to the state act in early January 2027 are underway and may include adding this meeting flexibility. If you have any questions about that process, contact Karen Smith, MCU SVP and Chief Advocacy Officer.

How do we make this change?

Your federal credit union bylaws likely have to be updated to remove the reference in the current model version to “monthly” in Article VI, Section 5. An America’s Credit Unions’ compliance blog notes that until NCUA updates its model version, you would need to obtain NCUA permission to approve a non-standard bylaw amendment. Hopefully, the agency will act soon, although they are in a leadership transition period with their new chairman scheduled to possibly be confirmed this week.

If your credit union decides to take advantage of this option, keep a few things in mind:

• Your current board meeting time may need to be adjusted to a bit longer meeting
• Current reports may need to be changed to reflect a non-monthly cadence
• You should ensure you still keep strategic discussions and time at the forefront of your meetings

Lastly, your credit union can also keep the monthly cadence on your calendar and use the off-months for training and strategic planning. It is worth considering using that time to further solidify the credit union’s future and still save on the preparation of a board packet.