TN Code § 45-4-703 (2021)
2021 Tennessee Code|Title 45 - Banks and Financial Institutions|Chapter 4 - Credit Unions|Part 7 - Capital and Reserves|§ 45-4-703. Reserve Fund for Contingencies — Capital Contributions — Special Assessments — Administrative Fees

   A regular reserve fund, belonging to the credit union, shall be maintained for contingencies. It shall not be distributed to the members except upon dissolution of the credit union. This fund shall be built up to and held at one thousand dollars ($1,000) or five percent (5%) of the outstanding loans (excluding unearned interest), whichever is greater. Transfers in an amount as hereinafter provided shall be made to the regular reserve fund at the close of each dividend period and at the close of each fiscal year for the period since the close of its last fiscal year or the close of the last dividend payment period, whichever last occurred. Each credit union shall transfer seven and one-half percent (7½%) of the gross income of the credit union to the regular reserve fund until the regular reserve fund shall equal two percent (2%) of outstanding loans; then five percent (5%) of gross income until the regular reserve fund shall equal three percent (3%) of outstanding loans; then two and one-half percent (2½%) of gross income until the regular reserve fund shall equal five percent (5%) of outstanding loans. Whenever the regular reserve fund falls below the stated percent of outstanding loans, transfer shall be made in amounts that may be needed to maintain the stated reserve levels.   The commissioner may either waive in whole or in part the reserve requirement pursuant to subdivision (a)(1) or increase the reserve requirement as deemed necessary for the protection of the interests of the credit union and its members.      In addition to the regular reserve fund requirement stated in subsection (a), a credit union shall maintain in or transfer to contingency reserves an additional amount so that the sum held in reserve satisfies the requirements of the credit union's share insuror.   The commissioner may increase the reserve requirement as deemed necessary for the protection of the interests of the credit union and its members.     Transfers out of the fund may be made to profit and loss of the amounts that are in excess of the level specified at the end of any fiscal year.   Capital contributions paid to the state credit union share insurance corporation pursuant to § 45-4-1108(a) and special assessments to the capital fund paid thereto pursuant to § 45-4-1108(d) shall constitute the credit union's only equity interest in the state credit union share insurance corporation. Capital contributions paid pursuant to § 45-4-1108(a) and special assessments to the capital fund paid pursuant to § 45-4-1108(d) shall be included as a part of the credit union's assets and shall be valued:  At the full value of the capital contributions paid pursuant to § 45-4-1108(a), or special assessments to the capital fund paid pursuant to § 45-4-1108(d);   At the value of the capital contributions or special assessments to the capital fund recoverable by the credit union should it voluntarily withdraw from membership in the state credit union share insurance corporation; or   At an eventual value of zero ($0) after amortizing the capital contributions or special assessments to the capital fund over a specified period of time.     Administrative fees paid by a credit union to the state credit union share insurance corporation pursuant to § 45-4-1109(a) shall be treated as annual expenses of the credit union. Any credit union that has capitalized any prior administrative fees shall be required to amortize the amount against reserves established under subsection (a) within a period not exceeding ten (10) years as approved by the commissioner.