Search OpenLegislation Statutes
This entry was published on 2014-09-22
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
Dividends to shareholders; conditions precedent
§ 460. Dividends to shareholders; conditions precedent. 1. The board
of directors of any credit union may declare a dividend from the credit
union's undivided profits calculated as provided in this article for any
period determined by the board of directors.

2. Earnings from all sources for the period for which a dividend is to
be paid, except as provided in section four hundred fifty-eight of this
article, may be credited to the profit and loss account of the credit
union and the following items shall be charged against such account in
the determination of the amount available for dividends to shareholders:

(a) All expenses paid or incurred by the credit union in the
management of its affairs, the collection of its debts or the
transaction of its business.

(b) The interest paid or accrued on debts owed by the credit union.

(c) All losses incurred on loans in excess of the allowance for loan
loss account.

(d) Any interest collected in advance shall be considered unearned at
the end of the fiscal period, and shall be set aside in an account
called "unearned interest".
The credit balance of the profit and loss account as thus determined
shall constitute the undivided profits of the credit union at the close
of such period, and shall be applicable to the payment of dividends
except as provided in subdivision three of this section.

3. No dividend shall be credited or paid unless the credit union has:

(a) Made good any existing impairment of its capital; and

(b) Carried to its allowance for loan loss account such part of its
earnings as is required by section four hundred fifty-nine of this

4. Dividends may be paid on shares and share certificates at various
rates with due consideration of the conditions that pertain to each type
of account such as minimum balance, notice and time requirements.

5. When any dividend shall be declared in excess of the amount
available for dividends as determined in accordance with the provisions
of this section, the directors voting for such dividend may be held
jointly and severally liable to the credit union for the amount of the
excess so declared.