Article 7. Reserves of California Financial Code >> Division 5. >> Chapter 4. >> Article 7.

Every credit union shall create and maintain a regular reserve as specified by the commissioner.

Losses incurred by a credit union may be charged to its regular reserve as permitted by rule of the commissioner.

In addition to the regular reserve, special reserves shall be established when required by regulation or when found necessary by the board of directors of the credit union or by the commissioner.

A credit union shall establish and maintain an allowance-for-loan-losses account in accordance with generally accepted accounting principles. The commissioner may order the credit union to increase the amount of its allowance-for-loan-losses account if the commissioner finds that the amount of the account is not adequate.