PART VI. 
RESERVE ALLOCATIONS



 



§412:10-600  Regular reserve.  (a)  At
the end of each accounting period and before the payment of any dividend, each
credit union shall set aside from its gross earnings the following reserve
against contingencies:



(1)  A credit union in operation for less than four
years or having assets of less than $500,000 shall set aside ten per cent of
its gross earnings until the regular reserve equals seven and a-half per cent
of its total outstanding loans and risk assets, whereupon the credit union
shall set aside five per cent of its gross earnings until the regular reserve
equals ten per cent of its total outstanding loans and risk assets.



(2)  A credit union in operation for four or more
years or having assets of $500,000 or more shall set aside ten per cent of
gross earnings until the balance in the regular reserve equals four per cent of
its total outstanding loans and risk assets, whereupon the credit union shall
set aside five per cent of its gross earnings until the regular reserve equals
six per cent of its total outstanding loans and risk assets.



(b)  Whenever a credit union's regular reserve
account falls below the percentages required by this section, the credit union
shall notify the commissioner and shall make up the deficiency by regular
contributions in such amounts as may be needed to maintain the required level.



(c)  The commissioner may decrease or waive
entirely the reserve requirement for an individual credit union in one or more
accounting periods when in the commissioner's opinion such a decrease is
necessary or desirable.



(d)  The regular reserve shall belong to the
credit union and shall be used to meet losses on risk assets and to meet such
other classes of losses as are approved by the commissioner.  The regular
reserve shall not be distributed except on liquidation of the credit union, or
in accordance with a plan approved by the commissioner. [L 1993, c 350, pt of
§1]