Section 18343 Of Article 1. General From California Financial Code >> Division 7. >> Chapter 5. >> Article 1.

. The commissioner may require an industrial loan company to establish and maintain reasonable reserves for loans made, and contracts or other obligations purchased or discounted in accordance with sound business practices. The commissioner may by rule or order:
  (a) Establish reasonable standards for the classification of loans and contracts or other obligations as to their delinquency or currency.
  (b) Prescribe the conditions requiring the writing off of delinquent loans and contracts or other obligations and the conditions under which they may be restored as part of corporate assets.
  (c) Establish the basis upon which reasonable and adequate reserves shall be created and maintained.