370.320. Reserve fund, how created.

MISSOURI STATUTES AND CODES

370.320. Reserve fund, how created.

Reserve fund, how created.

370.320. 1. All entrance fees, transfer fees and chargesshall, after the payment of the organization expenses, be knownas reserve income, and shall be added to the reserve fund of thecredit union.

2. At the end of each accounting period the gross incomeshall be determined. From this amount there shall be set apartto the reserve fund amounts in accord with the followingschedule:

(1) A credit union in operation for more than four years andhaving assets of five hundred thousand dollars or more shall setaside:

(a) Ten percent of gross income until the reserve equalsfour percent of the outstanding loans to members; and thereafter

(b) Five percent of gross income until the reserve equalssix percent of outstanding loans to members; or

(2) A credit union in operation less than four years orhaving assets of less than five hundred thousand dollars shallset aside:

(a) Ten percent of gross income until the reserve equalsseven and one-half percent of outstanding loans to members; andthereafter

(b) Five percent of gross income until the reserve equalsten percent of outstanding loans to members.

3. As used in this section, "outstanding loans to members"does not include loans to other credit unions, loans fullysecured by a member's shares, loans made under Title I of theNational Housing Act, or loans made under a federal or statestudent loan program or another similar loan program where theloan is guaranteed by an agency of the federal or stategovernment.

4. The board of directors may increase or, where such fundequals or exceeds the total reserve required in subsection 2 ofthis section, decrease the proportion of gross income to be setaside as the reserve fund, and may transfer part or all of theundivided earnings to the reserve fund.

5. The board of directors may establish additional reserves.In addition, a special reserve for delinquent loans shall beestablished when required by regulation of the director of thedivision of credit unions.