Article 14J.
Reserve Allocations.
§ 54‑109.86.  Transfers to regular reserve.
(a)	At the end of each accounting period the gross income shall be determined. From this amount, there shall be set aside, as a regular reserve against losses on loans and against such other losses as may be specified in regulations prescribed pursuant to law, sums in accordance with the following schedule:
(1)	A credit union in operation for more than four years and having assets of five hundred thousand dollars ($500,000) or more shall set aside
a.	Ten per centum (10%) of gross income until the regular reserve shall equal four per centum (4%) of the total of outstanding loans and risk assets, then
b.	Five per centum (5%) of gross income until the regular reserve shall equal six per centum (6%) of the total of outstanding loans and risk assets.
(2)	A credit union in operation less than four years or having assets of less than five hundred thousand dollars ($500,000) shall set aside
a.	Ten per centum (10%) of gross income until the regular reserve shall equal seven and one‑half per centum (7 1/2%) of the total of outstanding loans and risk assets, then
b.	Five per centum (5%) of gross income until the regular reserve shall equal ten per centum (10%) of the total outstanding loans and risk assets.
(3)	Whenever the regular reserve falls below the stated per centum of the total of outstanding loans and risk assets, it shall be replenished by regular contributions in such amounts as may be determined by the Administrator to maintain the stated reserve goals.
(b)	The Administrator, with the advice and consent of the Credit  Union Commission, may increase or decrease the reserve requirement set forth in subsection (a) of this section when such an increase or decrease is deemed necessary or desirable in order to conform to the reserve requirements of federally chartered credit unions.
(c)	In addition to such regular reserve, special reserves to protect the interests of members shall be established:
(1)	When required by regulation; or
(2)	When found by the Administrator, in any special case, to be necessary for that purpose.
(d)	Nothing in this section shall be construed as limiting the amount that a credit union may set apart to its reserve fund. (1915, c. 115, s. 21; C.S., s. 5222; 1939, c. 400, s. 2; 1955, c. 1135, s. 1; 1969, c. 69, ss. 2, 10; 1975, c. 538, s. 1; 1979, c. 293; 1997‑456, s. 27.)

§ 54‑109.87.  Use of regular reserve.
The regular reserve shall belong to the credit union and shall be used to meet losses except those resulting from an excess of expenses over income and shall not be distributed except on liquidation of the credit union, or in accordance with a plan approved by the Administrator of Credit Unions. (1975, c. 538, s. 1.)

§ 54‑109.88.  "Risk assets" defined.
For the purpose of establishing the reserves required by G.S. 54‑109.86, all assets except the following shall be considered risk assets:
(1)	Cash on hand.
(2)	Deposits and shares in federal or State banks, savings and loan associations, and credit unions.
(3)	Assets which are issued by, fully guaranteed as to principal and interest by, or due from the U.S. government, its agencies, Fannie Mae, or the Government National Mortgage Association.
(4)	Loans to other credit unions.
(5)	Loans to students insured under the provision of Title IV, Part B of the Higher Education Act of 1965 (20 U.S.C. 1071, et seq.) or similar state insurance programs.
(6)	Loans insured under Title I of the National Housing Act (12 U.S.C. 1703) by the Federal Housing Administration.
(7)	Shares or deposits in central credit unions organized under Article 14I of this Chapter of any other State act or of the Federal Credit Union Act.
(8)	Common trust investments which deal in investments authorized by Articles 14A to 14L of this Chapter.
(9)	Prepaid expenses.
(10)	Accrued interest on nonrisk investments.
(11)	Furniture and equipment.
(12)	Land and buildings.
(13)	Loans secured by shares.
(14)	Deposits in mutual savings guaranty associations which qualify under Article 7A of Chapter 54 of the General Statutes.
(15)	Investments in the College Foundation. (1975, c. 538, s. 1; 1977, c. 559, s. 8; 2001‑487, s. 14(c).)

§§ 54‑109.89 through 54‑109.91.  Reserved for future codification purposes.