§31C-9-3. Reserve funds.
(a) At the end of each accounting period the credit union
shall determine its gross income and from this amount shall set
aside and transfer funds to a regular reserve. The credit union
shall transfer to the reserve amounts as required under a schedule
set by the national credit union administration (NCUA) or its
successor. If no such schedule is set, then the reserve shall be
at a rate of ten percent of gross income until such time as the
reserve fund reaches five percent of risk assets; then the formula
is decreased to seven percent of gross income until such time as
the reserve fund reaches six percent of risk assets; and then the
formula is decreased to five percent of gross income until the
reserve fund attains a maximum of seven percent of risk assets,
with subsequent transfers required only to maintain the seven
percent maximum. The reserves established under this section shall
belong to the credit union and shall be held to meet contingencies
or losses in its business.
(b) Special reserves to protect the interest of members may be
required by the commissioner by rule, or when found by the credit
union's board of directors or by the commissioner, in any special
case, to be necessary for that purpose. These may include
allowances for loan losses and investment losses.