ALEXANDRIA, Va.–Federal credit unions should be able to find it easier to recruit and retain volunteer members of the board under a new proposal by NCUA.
During its board meeting, NCUA Chairman Kyle Hauptman—who remains the lone member of the board—was given an update on the proposed Dependent Care and Board Member Expense Reimbursement rule from Keisha Brooks, attorney-advisor for the Office of General Counsel.
The proposed rule would enable FCU boards to establish policies that allow for the payment of reasonable dependent care costs incurred by volunteer officials while attending board meetings and performing their official credit union duties.
As the agency noted, previously, dependent care costs have not been considered to be reasonable expenses under the current NCUA regulation at 12 C.F.R. § 701.33.
Volunteering Can be ‘Difficult’
“Childcare and eldercare costs have risen significantly over the past 30 years making volunteering on credit union boards difficult for many individuals,” NCUA said in a statement. “Accordingly, the Board is proposing to include dependent care costs as a reimbursable expense.”
The proposed rule would apply to all federal credit unions, including corporate FCUs. It would not apply to federally insured, state-chartered credit unions.
“…These expenses can make volunteering difficult especially for large families, single parents and those caring for aging protest,” said Brooks. “NCUA recognizes those realities and supports broader participation without altering the restrictions on compensation required by the statute.”
IRS Standards Adopted
Brooks said the proposed rule adopts the Internal Revenue Code standard for a qualifying individual, which generally includes a child underage 13, a disabled dependent who is physically or mentally incapable of self-care, or disabled spouse who meets the same standard and shares the same residence.
Brooks added the proposal is designed to keep discretion about reimbursement within federal credit unions and their boards to develop policies, including the option to decline having such a policy.
“The proposed amendment aligns with the credit union volunteer spirit while easing a potential real-world barrier to volunteer service,” said Brooks. “It preserves board discretion, maintains existing safety and soundness guardrails, and introduces a practical tool to broaden participation.”
Hauptman Expresses Support
Following Brooks’ comments, Hauptman said the proposal is a “significant step” in supporting credit unions and carrying out their mission, as the agency recognizes credit unions are dependent on volunteer officials “who give their time and expertise to a job with zero compensation.” He said that for the approximately 20,000 credit union volunteers the proposal would affect it is a “real option,” and may help make board volunteerism available to those who have declined in the past due to the cost of dependent care while they are attending meetings.
It Adds Up
Hauptman noted it’s been more than 30 years since the agency has addressed the issue, “and a lot of things have changed. Child care has skyrocketed; I can tell you from personal experience.” He cited Department of Labor data showing American families spend $16,000 annually on full-time childcare in 2022, and between $6,000-$9,000 on part-time childcare, a figure he said is much higher in markets such as Washington.
Those in the Sandwich Generation also face costs related to care for aging parents, he added.
The proposal is now out for comment.
