What Credit Unions Need to Know about the Credit Union Modernization Act

A recent post on America's Credit Unions' Compliance Blog examines the Credit Union Modernization Act and outlines what credit unions need to know. You can read the full blog post here.

Key highlights include:

• The Credit Union Modernization Act amends the Federal Credit Union Act (FCU Act) to permit federally chartered credit unions to hold a minimum of six board meetings per year, rather than the previously required twelve. However, at least one meeting must still be held during each fiscal quarter.

• Federal credit unions with a composite rating of 3, 4, or 5 under the Uniform Financial Institutions Rating System, or an equivalent rating under a comparable system, must continue to hold monthly board meetings. This requirement also applies to credit unions "with a capability of management rating under such composite rating of either 3, 4, or 5." In addition, de novo, or newly chartered, credit unions must hold monthly board meetings during their first five years of operation.
• The statutory change does not automatically amend the Federal Credit Union Model Bylaws. Federally chartered credit unions should continue to follow their current bylaws until the NCUA updates the Model Bylaws. Once updated, credit unions may adopt the revised provisions.
• Because the Credit Union Modernization Act amends the FCU Act, its provisions apply only to federally chartered credit unions. However, some state credit union laws include "wild card" provisions that may allow state-chartered credit unions to seek parity with the new federal requirements.