HRS §412:10-601
Special reserve accounts for credit unions
A credit union's board of directors can create special reserve accounts, or the state credit union commissioner can require a specific credit union to create them, to protect members' interests. This can happen when the credit union buys accounts or faces losses that threaten its regular reserves. These special reserves can cover loan and investment losses.
The statute, as written — Special reserves
The board of directors may establish, or [the] commissioner may require any credit union on an individual basis to establish, and transfer funds into one or more special reserve accounts when in the board's or the commissioner's judgment such action is necessary to protect the interests of the credit union's members, including without limitation circumstances when a credit union purchases accounts, or suffers an impairment or threat of impairment that endangers the adequacy of its regular reserve account. Special reserves may include allowances for loan losses and investment losses.
LawTrove is not legal advice. The summary above is a computer-generated restatement — the authoritative text is the official version linked above.