The board of directors may authorize and declare dividends, but a credit union may pay dividends only from current net earnings and undivided profits, and extra reserve requirements apply when loans are delinquent.
§658. Dividends A. At such intervals as the board of directors may authorize and after provision for the required reserve and subject to applicable federal regulations, the board of directors may declare a dividend to be paid, at different rates on different types of shares, and at different rates and maturity dates in the case of share certificates, from the remaining net earnings. Dividend credit may be accrued on various types of shares and share certificates as authorized by the board of directors. B. Provided no credit union shall declare or pay any dividends on its shares except from current net earnings, and undivided profits. Provided, further, that in the event of delinquency in loans there shall be no dividends paid unless the reserve fund shall be equal to or in excess of the sum of 10 percent of the unpaid balance of loans delinquent more than two months and less than six months, plus twenty-five percent of the unpaid balances of loans delinquent from six months to less than twelve months, plus fifty percent of the unpaid balances of loans delinquent from twelve months to less than eighteen months, plus one hundred percent of the unpaid balances of loans delinquent eighteen months or more; provided, further, that in the event the legal reserve fund does not equal the amount required as hereinabove set forth, then and in that event the reserve fund shall be supplemented by a special reserve for delinquent loans in an amount which will make the reserve fund and the special reserve equal to the sum required in accordance with the schedule hereinabove set forth. Amended by Acts 1954, No. 530, §1; Acts 1970, No. 401, §6; Acts 1975, No. 653, §3; Acts 1977, No. 165, §1.