BLAIR LEE III, Acting Governor

1279

When the reserve fund equals the greater of either 10% of
the amount paid in on shares by members or 10% of the total
amount of outstanding loans to members, there shall be
transferred thereafter to the reserve fund only the amount
necessary to maintain the reserve fund at the greater of
either 10% of the amount paid in on shares by members, or
10% of the total amount of outstanding loans to members,
after losses have been charged against the fund.]

BEGINNING__JULY 1, 1978 AT THE END OF EACH ACCOUNTING PERIOD

THE GROSS INCOME SHALL BE DETERMINED. FROM THIS AMOUNT
THERE SHALL BE SET ASIDE AS A REGULAR RESERVE AGAINST LOSSES
ON LOANS AND AGAINST SUCH OTHER LOSSES AS MAY BE SPECIFIED
BY THE BANK COMMISSIONER IN ACCORDANCE WITH THE FOLLOWING
SCHEDULE:

(1)    A CREDIT UNION IN OPERATION FOR MORE THAN
FOUR YEARS AND HAVING ASSETS OF $500,000 OR MORE SHALL SET
ASIDE:

(I)    10 PERCENT OF GROSS INCOME UNTIL THE
REGULAR RESERVE EQUALS 4 PERCENT OF THE TOTAL OF OUTSTANDING
LOANS AND RISK ASSETS, AND THEN

(II)   5 PERCENT OF GROSS INCOME UNTIL THE

REGULAR RESERVE EQUALS 6 PERCENT OF THE TOTAL OUTSTANDING
LOANS AND RISK ASSETS.

(2)    A CREDIT UNION IN OPERATION LESS THAN FOUR
YEARS OR HAVING ASSETS OF LESS THAN $500,000 SHALL SET
ASIDE:

(I)    10 PERCENT OF THE GROSS INCOME UNTIL
THE REGULAR RESERVE EQUALS 7 1/2 PERCENT OF THE TOTAL OF
OUTSTANDING LOANS AND RISK ASSETS, AND THEN

(II)   5 PERCENT OF GROSS INCOME UNTIL THE
REGULAR RESERVE EQUALS 10 PERCENT OF THE TOTAL OF
OUTSTANDING LOANS AND RISK ASSETS.

(3)    WHENEVER THE REGULAR RESERVE FALLS BELOW
THE STATED PERCENT OF THE TOTAL OF OUTSTANDING LOANS AND
RISK ASSETS, IT SHALL BE REPLENISHED BY REGULAR
CONTRIBUTIONS IN SUCH AMOUNTS AS MAY BE NEEDED TO MAINTAIN
THE STATED RESERVED GOALS.

(4)    FOR THE PURPOSES OF ESTABLISHING THE
RESERVES REQUIRED BY THIS SECTION, ALL ASSETS EXCEPT THE
FOLLOWING SHALL BE CONSIDERED RISK ASSETS:

(I)    CASH ON HAND.

(II)   DEPOSITS AND/OR SHARES IN FEDERALLY
AND STATE INSURED BANKS, AND SAVINGS AND LOAN
ASSOCIATIONS, AND CREDIT UNIONS.

(III)  ASSETS WHICH ARE INSURED BY, FULLY
GUARANTIED AS TO PRINCIPAL AND INTEREST BY, OR DUE FROM THE
U.S. GOVERNMENT, ITS AGENCIES, THE FEDERAL NATIONAL MORTGAGE