SECTION .0500 ‑ IMPAIRMENT AND INSOLVENCY

 

04 NCAC 06C .0501          IMPAIRMENT

(a)  An impairment of share capital shall be deemed to exist

if the Credit Union is unable to provide for Allowance for Loan Losses, or any

other reserve required by the Administrator.

(b)  In determining the degree of capital impairment which

may exist, loans receivable shall be valued at book value less the amount of

reserves required.  The total of the credit union's assets, valued according to

generally accepted accounting principles, including loans receivable, less

current and long‑term liabilities, shall be considered to be net assets. 

If share deposit balances exceed net assets so determined, an impairment shall

be deemed to exist.

(c)  Whenever it is determined that there exists an

impairment of capital, the Board of directors shall notify the Administrator. 

If required by the Administrator, the Board of directors shall disclose to all

shareholders the impairment of capital and such other matters regarding the financial

condition of the Credit Union as deemed relevant by the Administrator.

 

History Note:        Authority G.S. 54‑109.12;

Eff. February 1, 1976;

Readopted Eff. April 4, 1978;

Amended Eff. January 1, 1983.