ALEXANDRIA, Va. – The NCUA Board has proposed a rule that would greatly expand who can be reimbursed when accompanying a federal credit union board official traveling on credit union business. Currently, the Federal Credit Union Act allows a board official and one "immediate family member" to be reimbursed for travel expenses related to performing board duties if the payment is deemed necessary and appropriate by the credit union's board. This wasn't always the case. Prior to 1992, only federal credit union board officials could be reimbursed for business travel. NCUA amended Section 701.33 of the Act on November 19, 1992 to allow for reimbursement of an "immediate family member." That term has been interpreted by NCUA as permitting reimbursement for someone who has a "familial" relationship with a board official. As part of that amendment, NCUA required that FCU boards have policies ensuring that the only permitted reimbursement is for travel "necessary and appropriate to carry out FCU official business, and reasonable in relation to the FCU's resources and financial condition." At the July NCUA Board meeting, the board proposed a rule that would amend the rule to delete the term "immediate family member" and replace it with "guest." "Now the NCUA Board believes that there may be cases when an FCU official wishes to be accompanied by a person other than an immediate family member when on business travel. FCU officials who are unmarried and who do not have immediate family members might be constrained from attending certain events to promote credit union business activities, if not permitted to bring a travel companion," states the proposal. NAFCU Communications Manager John Zimmerman said he's already hearing some disagreement on this issue from credit unions, and he anticipates more. "We expect some sharp positions on this which is a core issue for credit unions, that is the issue of volunteer directors," said Zimmerman. GTE FCU President/CEO Bucky Sebastian said he's in favor of the proposed rule because it puts more power in the hands of FCU boards to decide the issue. "I think the credit union ought to be free to make the choice. The rules says they can do it, it doesn't mean a credit union has to. It's very natural for directors to want to take a guest along, and the credit union should be able to have the choice to set the guidelines," said Sebastian. "The way we characterize it is it's a recognition that times have changed. People have relationships that don't always fall under the category of a family member. Those relationships are still real and legitimate," said CUNA Associate General Counsel Mary Dunn. "It's up to the board to have a written policy spelling out how it plans to handle this." "I know questions have been raised about abuse, but written policies should cover this. These kinds of expenses are still subject to disclosure. The examiner would be be privy to looking into this. In many cases, if not most cases, this will be income for the person who is paid. They'll have to report that to the IRS," said Dunn. Dunn said the new proposal doesn't change the fact that reimbursement for travel related to official CU business is income and must be reported to the IRS. [email protected]