Credit Union Board Modernization Act
Credit Union Board Modernization Act amends the Federal Credit Union Act to change how often boards of directors must meet. Instead of a universal monthly requirement, the bill creates a tiered schedule based on the credit union’s performance ratings and status. Newly chartered (de novo) federal credit unions would be required to meet at least monthly for the first five years. For existing federal credit unions, meeting frequency would depend on their rating under the Uniform Financial Institutions Rating System (or an equivalent rating system): top-rated credit unions (composite rating 1–2 and management capability 1–2) would need at least six meetings per year (roughly quarterly), while members with lower ratings (composite 3–5 or management 3–5) would still be required to meet at least monthly. The act retains a monthly minimum for lower-rated entities and tightens the standard for high-performing ones, creating a differentiated governance requirement rather than a one-size-fits-all standard.
Key Points
- 1The act changes the general rule from “monthly meetings” to a tiered approach based on rating status.
- 2De novo federal credit unions must meet not less than monthly during each of their first five years of existence.
- 3For credit unions rated 1 or 2 (composite rating) and with management capability 1 or 2, the board must meet not less than six times annually, with at least one meeting per fiscal quarter.
- 4For credit unions rated 3–5 (composite) or with management capability rated 3–5, the board must continue meeting not less than once a month.
- 5The framework uses the Uniform Financial Institutions Rating System (or an equivalent rating system) to determine the applicable meeting frequency.