Every credit union shall create and maintain a regular reserve as specified by the commissioner.
Management and OperationsReserves
Section § 14700
Every credit union in California is required to set up and keep a savings fund, called a regular reserve, according to the rules set by a state financial official known as the commissioner.
credit union regular reserve financial regulation
Section § 14701
Credit unions in California can cover their financial losses by using their regular reserve, but they must follow the rules set by the commissioner.
Losses incurred by a credit union may be charged to its regular reserve as permitted by rule of the commissioner.
credit union losses regular reserve commissioner rules
Section § 14702
This law states that aside from the usual reserve fund, credit unions must also set up special reserves when regulations demand it, or if the credit union's board of directors or the commissioner decides it's needed.
In addition to the regular reserve, special reserves shall be established when required by regulation or when found necessary by the board of directors of the credit union or by the commissioner.
credit union special reserves reserve requirements
Section § 14703
This law requires credit unions to set up and keep a special account for potential loan losses, following standard accounting rules. If the state's financial regulator thinks the account doesn't have enough funds, they can demand that the credit union increases the amount in this account.
A credit union shall establish and maintain an allowance-for-loan-losses account in accordance with generally accepted accounting principles. The commissioner may order the credit union to increase the amount of its allowance-for-loan-losses account if the commissioner finds that the amount of the account is not adequate.
credit union allowance-for-loan-losses GAAP
