Breaking: NCUA Moves to Remove a Major Barrier to Board Service

In this emergency update of With Flying Colors, Mark breaks down a newly proposed NCUA rule that could meaningfully reduce barriers to serving on a federal credit union board.

The proposal would allow federal credit unions to reimburse or directly pay reasonable dependent care costs for volunteer officials when those costs are incurred while attending board meetings or performing official duties — including, potentially, training and conferences.

This is a narrow but important change that reflects rising childcare and eldercare costs, declining volunteerism, and the increasing demands placed on credit union boards.

Mark also shares brief updates on the Central Liquidity Facility (CLF), NCUA’s regulatory simplification efforts, and what’s coming next on the podcast following recent discussions at a credit union conference cruise.

🔍 What the Proposed Rule Would Do

• Applies to federal credit unions only (state charters follow state law)
• Allows reimbursement or direct payment of:
  • Childcare
  • Adult dependent care (elder care, disabled dependents)
• Covers costs incurred while:
  • Attending board meetings
  • Performing official duties (which may include training and conferences)
• Applies only to volunteer officials, not paid executives

🚫 What the Rule Does Not Do

• Does not allow reimbursement for:
  • Lost wages
  • Paid leave
  • Indirect costs of volunteering
• Does not change compensation rules under the Federal Credit Union Act
• Does not require credit unions to reimburse these costs — policies remain optional and discretionary
• Does not change IRS tax treatment — consult tax professionals for reporting requirements

💡 Why This Matters

• Childcare costs have increased more than 200% since 1990
• Volunteer participation has declined significantly since pre-pandemic levels
• Federal credit union boards:
  • Must meet at least 12 times per year
  • Cannot generally be compensated
• This proposal may help:
  • Attract younger and working-age professionals
  • Support caregivers and single parents
  • Improve diversity of experience and perspective on boards

🧭 What NCUA Is Asking for Public Comment On

NCUA is inviting industry feedback on:

• Whether reimbursement should be limited to temporary or incremental costs
• Whether training and conference travel should clearly qualify as official duties
• Documentation and internal control standards
• Best practices from state-chartered credit unions

Credit unions and board members are encouraged to submit comments during the open comment period.

🔜 What’s Coming Next on the Podcast

• A follow-up episode with Mark’s team discussing:
  • NCUA’s 2025 Supervisory Priorities Letter
  • What it really means for exams and operations
• Coverage of NCUA’s upcoming webinar on supervisory priorities (February 19)
• Continued “emergency update” episodes when time-sensitive issues break