Ohio Code § 1733.31

§ 1733.31.

For purposes of this section, “ gross income ” means all income, before expenses, earned on risk assets. “Risk assets” shall be defined by rule adopted by the superintendent of credit unions. Each credit union shall establish and maintain reserves as required by Chapter 1733.

of the Revised Code, or by rules adopted by the superintendent, including the following: (A) Valuation allowances for delinquent loans, investments, other risk assets, and contingencies,

which shall be established and maintained pursuant to rules adopted adopted 1 by the superintendent. (B) A regular reserve as follows: (1) A credit union in operation for more than four years and having assets of five hundred

thousand dollars or more shall reserve ten per cent of its gross income until its

regular reserve equals four per cent of its total risk assets.  Once the credit union has regular reserves equal to four per cent of its total risk

assets, it shall reserve five per cent of its gross income until its regular reserve

equals six per cent of its total risk assets. (2) A credit union in operation for less than four years or having assets of less than

five hundred thousand dollars shall reserve ten per cent of its gross income until

its regular reserve equals seven and one-half per cent of its total risk assets.  Once the credit union has regular reserves equal to seven and one-half per cent

of its total risk assets, it shall reserve five per cent of its gross income until

its regular reserve equals ten per cent of its total risk assets. (3) The provision for loan losses, or other such provisions related to the valuation

allowances described in division (A) of this section, recorded on the credit union's

statement of income for the year shall be deducted from the appropriate regular reserve

calculated under division (B)(1) or (2) of this section. (4) Once the credit union has closed out its net income or loss to undivided earnings,

it may allocate any extraordinary loss for the year, as defined by AICPA APB Opinion

No. 30 or by rules as promulgated by the superintendent, to the regular reserve. (5) If the regular reserve account becomes less than the percentage required by division

(B)(1) or (2) of this section, then the schedule of allocation shall apply until the

required percentages are achieved. (6) The superintendent may decrease the reserve requirements under division (B)(1) or

(2) of this section when, in the superintendent's opinion, a decrease is necessary

or desirable and is consistent with the purposes of this section. (7) Nothing herein shall prevent the superintendent from requiring a particular credit

union or all credit unions to establish a regular reserve in excess of the percentages

required by division (B)(1) or (2) of this section if, in the opinion of the superintendent,

economic conditions or other appropriate circumstances so warrant. (C) Except as otherwise provided in this division, each credit union shall maintain a

liquidity fund equal to five per cent of its shares.  The assets included in the liquidity fund shall be defined by rule adopted by the

superintendent.  The superintendent may require a particular credit union or all credit unions to

establish a liquidity fund greater than or less than five per cent of total shares,

if, in the opinion of the superintendent, economic conditions or other appropriate

circumstances so warrant. (D)(1) Reserves for corporate credit unions shall be established by the superintendent with

due regard for the reserving requirements for corporate credit unions set by the applicable

insurer recognized under section 1733.041 of the Revised Code .  Specific reserving requirements shall be established by rule of the superintendent,

but shall substantially parallel the reserving formula set by the applicable insurer

recognized under section 1733.041 of the Revised Code . (2) Nothing in division (D)(1) of this section shall prevent the superintendent from

requiring a particular corporate credit union or all corporate credit unions to establish

a regular reserve in excess of those reserves established pursuant to division (D)(1)

of this section if, in the opinion of the superintendent, economic conditions or other

appropriate circumstances so warrant. 1

 So in original;  2005 H 81.