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§ 6-703. Reserve fund requirements

West's Annotated Code of MarylandFinancial Institutions

West's Annotated Code of Maryland
Financial Institutions
Title 6. Credit Unions (Refs & Annos)
Subtitle 7. Miscellaneous Regulations (Refs & Annos)
MD Code, Financial Institutions, § 6-703
§ 6-703. Reserve fund requirements
Currentness
Risk assets defined
(a) In this section, “risk assets” means a credit union's total loans outstanding to its members.
Credit unions required to have reserve funds
(b)(1) Each credit union shall have a reserve fund to meet losses on loans and to meet other contingencies that the Commissioner specifies.
(2) The reserve fund may be distributed to the members of the credit union only on dissolution of the credit union.
Credits to reserve fund
(c)(1) After paying organization expenses, each credit union shall credit to its reserve fund all entrance fees, transfer fees, and fines.
(2) A credit union in operation for 4 years or more and having assets of $500,000 or more shall credit to the reserve fund, at the end of each accounting period:
(i) 10 percent of its gross income until the reserve fund equals 4 percent of its risk assets; and
(ii) Then, 5 percent of its gross income until the reserve fund equals 6 percent of its risk assets.
(3) A credit union in operation for less than 4 years or having assets of less than $500,000 shall credit to the reserve fund, at the end of each accounting period:
(i) 10 percent of its gross income until the reserve fund equals 7.5 percent of its risk assets; and
(ii) Then, 5 percent of its gross income until the reserve fund equals 10 percent of its risk assets.
(4) On recommendation of the board, the amount credited to the reserve fund may be increased.
Restoration of fund
(d) If the reserve fund falls below the amounts required by subsection (c)(2) or (3) of this section, it shall be restored by regular contributions.

Credits

Added as Financial Institutions § 6-602 by Acts 1980, c. 33, § 2, eff. July 1, 1980. Amended by Acts 1988, c. 635, § 1, eff. June 1, 1988; Acts 1996, c. 326, § 2, eff. July 1, 1996; Acts 1997, c. 679, § 1, eff. Oct. 1, 1997. Renumbered as Financial Institutions § 6-703 and amended by Acts 2001, c. 147, § 1, eff. Oct. 1, 2001; Acts 2001, c. 148, § 1, eff. Oct. 1, 2001.
Formerly Art. 11, § 154.
MD Code, Financial Institutions, § 6-703, MD FIN INST § 6-703
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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