04 NCAC 06C .0401. DELINQUENT LOANS AND LOAN LOSSES

(a)  Monthly Schedule of Delinquent Loans.  Each credit union shall, at the end of each month, prepare and review a schedule of delinquent loans which shall list in columnar form the account number, names of borrowers, date of loan, date of last payment, original amount of loan and outstanding balance of loan at date of schedule, together with space to note current action or status.

The unpaid balance of loans shall be set apart in columns of the schedule of delinquent loans which will indicate the extent of delinquency as determined by the delinquent installments according to the note contract, as follows:

(1)        Loans on which the delinquent installments are two months but less than six months past due;

(2)        Loans on which the delinquent installments are six months but less than 12 months past due;

(3)        Loans on which the delinquent installments are past due 12 months or more.

(b)  Allowance for Loan Losses.

(1)        Each credit union shall establish and maintain such reserves as may be required by the Act or by regulation, or in special cases by the Administrator.  All Credit Unions shall establish an Allowance for Loan Losses Account.  The Allowance for Loan Losses Account is not an addition to but a part of the Regular Reserve as required by statute.

(2)        The maintenance of a valuation Allowance for Loan Losses Account shall not eliminate the requirement for transferring a percentage of gross income before the payment of each dividend to the Regular Reserve as required by the Credit Union Laws.

(3)        As a minimum, adjustments to the valuation Allowance for Loan Losses shall be made prior to the distribution or posting of any dividend to the accounts of all the members so that the valuation allowance established fairly presents the value of loans and anticipated losses.

(4)        Adjustments to the valuation Allowance for Loan Losses will be recorded in the expense account "Provision for Loan Losses."

(5)        Dividends shall not exceed the amount available for that purpose after provisions have been made for the statutory transfer to the Regular Reserve Account and the removal of any deficit in the Regular Reserve Account.

 

History Note:        Authority G.S. 54‑109.12; 54‑109.17; 54‑109.86; 54‑109.87;

Eff. February 1, 1976;

Readopted Eff. April 4, 1978;

Amended Eff. February 1, 1992; October 1, 1983; January 1, 1983; March 1, 1982.