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.