I had the same problem after the 2.0.4 update. New UM registrations were assigned to the default WP role which was not recognized as a UM role. You can fix this in one of two ways:
METHOD 1) Change the default WP role to one that is defined in UM. Go to: WordPress Dashboard > Settings > General > New User Default Role. Select the um_member role you were using before the 2.0.4 update.
METHOD 2) “Reset User Role Meta” for the WP default role. This will allow you to use a user role defined in WP, as a UM role. Go to: WordPress Dashboard > Ultimate Member > User Roles, then mouse over the WP role set as the default. When you mouse over, the “Reset User Role Meta” link will appear. Click the link. This will activate UM settings so you can then use this role in any UM function.