Alaska Administrative Code
Title 3 - Commerce, Community, and Economic Development
Part 1 - Banking, Securities, Small Loans and Corporations
Chapter 03 - Credit Unions
Article 2 - Credit Union Practices
3 AAC 03.160 - Reserves
Universal Citation: 3 AK Admin Code 03.160
Current through February 24, 2025
(a) Use of Reserves. The reserve fund will belong to the credit union and will be used to meet losses, except those resulting from an excess of expenses over income, and will not be distributed except on liquidation of the credit union or in accordance with a plan approved by the department.
(b) Risk Assets. For the purposes of establishing reserves required by AS 06.45.180, all assets except the following will be considered risk assets:
(1) cash on
hand;
(2) deposits and shares in
federally or state insured banks, savings and loan associations, and credit
unions;
(3) assets which are
insured by, fully guaranteed as to principal and interest by, or due from the
U.S. government, its agencies, the Federal National Mortgage Association, or
the Government National Mortgage Association;
(4) loans to other credit unions;
(5) loans to students insured under the
provisions of Title IV, Part B of the Higher Education Act of 1965
(20 U.S.C.
1071), as amended on June 15, 1977, or
similar state insurance programs;
(6) loans that are fully or partially insured
or guaranteed by the federal or a state government or any federal or state
agency;
(7) shares or deposits in
corporate credit unions;
(8) common
trust investments which deal in investments authorized by FCUA;
(9) prepaid expenses;
(10) accrued interest on nonrisk
investments;
(11) furniture and
equipment;
(12) land and
buildings;
(13) loans fully secured
by a pledge of shares in the lending credit union, equal to and maintained to
at least the amount of the loan outstanding;
(14) loans which are purchased from
liquidating credit unions and guaranteed by NCUA;
(15) National Credit Union Share Insurance
Fund Guaranty Accounts established with the authorization of NCUA under the
authority of Sec. 208(a)(1) of FCUA (12 U.S.C. 1788 as amended on
November 10, 1978); and
(16)
investments in the NCUA Central Liquidity Facility.
(c) Corporate Credit Union.
(1) "Risk assets" of a corporate credit union
are defined in (b) of this section, except loans made to its member credit
unions will not be considered risk assets.
(2) In addition to the regular reserve
required by
AS
06.45.180, a corporate credit union must
establish and maintain a corporate reserve which must be established
immediately before the payment of each dividend, as follows:
(A) a transfer of two percent of gross income
must be made to the corporate reserve until that reserve equals one and
one-half percent of the corporate credit union's total assets;
(B) whenever the corporate reserve falls
below one and one-half percent of total assets, it must be replenished by
regular transfers of two percent of gross income or by contributions in such
amounts as may be needed to maintain the corporate reserve at one and one-half
percent of total assets, whichever is less;
(C) charges may be made against the corporate
reserve to the same extent and in the same manner as those permitted to be made
against the regular reserve.
Authority:AS 06.45.010
AS 06.45.180
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