1968 Ed.]
Credit Unions.
[CAP. 119
17
(4) A credit union may not borrow money so that its total indebtedness would in consequence exceed twenty-five per cent of its share balance, except in addition to the board's resolution, upon a resolution passed by not less than three-fourths of the members, present and qualified to vote, at a special meeting of the credit union called for the purpose or if sanctioned in writing by not less than two-thirds of the total number of the members of the credit union qualified to vote.
44. A credit union may mortgage, charge or pledge any of its property to secure any liability for the repayment of money borrowed in accordance with section 43.
Reserve fund.
45. (1) The board shall set aside a reserve fund, into which shall be paid-
(a) all entrance fees and fines collected from members; and
(b) during each financial year, not less than twenty per cent of the net earnings for the previous financial year, before the declaration or payment of any dividend in relation to the previous financial year,
until the reserve fund is equal to at least ten per cent of the share balance of the credit union, and such further amounts of the net earnings shall be paid into the fund in every year as may be necessary to maintain that percentage.
(2) The reserve fund shall not be used in making loans to members of the credit union.
(3) Any income received from any part of the reserve fund which is deposited or invested shall be paid to the general revenue of the credit union.
(4) The reserve fund shall be kept as a reserve against losses incurred from loans made by the credit union which remain outstanding after the time for their repayment in full has expired and other losses, other than excess expenditure over income, incurred by the credit union, and shall not be used for any other purpose except upon the winding-up of the credit union or with the prior approval in writing of the Registrar:
Provided that during the twelve months next following the date of its registration, an amount not exceeding the total of the entrance fees collected from members may be drawn from the reserve fund to meet any expenses incurred in the formation and organization of a credit union.
Dividends.
46. (1) After provision is made for the reserve fund, in accordance with section 45, and before the holding of the annual meeting of the credit union for that year, the board may by resolution recommend that a dividend, not exceeding six per cent per
Power to mortgage, etc. as security for borrowed money.
Reserve fund.
Declaration, limit and payment of dividend.