NCUA Proposes Dependent Care Reimbursement for Volunteer Board Members: Why It Matters

NCUA has issued a proposed rule that, while narrow in scope, could have a meaningful impact on who is able to serve on federal credit union boards.

After listening to and digesting the proposal and the accompanying board briefing, I believe this is a positive — and long overdue — step toward removing a real, practical barrier to volunteer service.

What the Proposal Would Do

Under the proposed rule, federal credit unions would be permitted 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

That second phrase is important. “Official duties” can reasonably include activities such as:

• Required board training

• Conferences and educational programs

• Other credit union–related responsibilities assigned by the board

In other words, this proposal isn’t limited to the monthly board meeting. It potentially applies to the full scope of what modern board service requires.

Who This Applies To — and Who It Doesn’t

This proposal applies only to federal credit unions. State-chartered credit unions must continue to follow state law, though some states provide reciprocity or broader authority in this area.

It also applies only to volunteer officials — not paid executives or staff.

And just as important, the proposal does not allow:

• Reimbursement for lost wages

• Paid leave

• Any form of compensation for board service

This is strictly about reimbursing out-of-pocket dependent care costs that arise because someone is fulfilling their duties as a volunteer official.

Why NCUA Is Moving in This Direction

NCUA’s rationale reflects some broader realities:

• Childcare and eldercare costs have risen dramatically over the last several decades

• Volunteer participation has declined since pre-pandemic levels

• Board responsibilities have become more complex and more time-intensive

At the same time, federal credit union boards are still generally required to meet at least 12 times per year, and volunteer officials (other than one compensated officer) cannot be paid for their service under the Federal Credit Union Act.

That combination creates a real tension:we expect more from boards, but we also make it harder for working professionals and caregivers to participate.

This proposal doesn’t solve board recruitment challenges by itself, but it does remove one very real friction point.

Why This Could Matter for Board Diversity and Recruitment

In practice, dependent care responsibilities often fall on:

• Working parents

• Single parents

• Members of the “sandwich generation” caring for both children and aging parents

Those same groups are often exactly who credit unions say they want more of on their boards — people who actively use modern financial services and reflect the demographics of today’s membership.

When someone says, “I’d like to serve, but I just can’t make that commitment right now,” cost is often part of that equation, even if it isn’t always stated directly.

Allowing dependent care reimbursement doesn’t eliminate the time commitment, but it does reduce the financial penalty that can come with serving.

Guardrails Still Apply

This proposal does not remove existing controls.

Federal credit unions would still need to:

• Adopt written reimbursement policies

• Ensure costs are reasonable and appropriate

• Consider safety and soundness impacts

• Maintain proper documentation

And NCUA retains the authority to object to policies that are unsafe, unsound, or present risk to the Share Insurance Fund.

In other words, this is not a blank check. It’s a limited expansion of what may qualify as a reimbursable expense.

An Important Opportunity to Comment

NCUA is specifically asking for public input on several issues, including:

• Whether reimbursement should be limited to temporary or incremental costs

• Whether training and conferences should clearly qualify as “official duties”

• Documentation and internal control standards

• Best practices from state-chartered credit unions

If you are a federal credit union — especially if you’ve struggled to recruit or retain board members because of caregiving responsibilities — this is a proposal worth commenting on.

Rules often evolve based on what regulators hear during the comment period, and this is a case where real-world operational input could meaningfully shape the final version.

Bottom Line

This proposal does not change the fundamental volunteer nature of federal credit union boards. It does not introduce compensation. And it does not guarantee that every credit union will adopt dependent care reimbursement policies.

But it does acknowledge something important:volunteer service today carries real costs, and removing unnecessary barriers helps preserve the strength and diversity of credit union governance.

From my perspective, that’s a healthy direction for the federal credit union charter.