Submitted by sevans on Thu, 11/13/2014 - 3:34pm

A credit union’s capital is defined as the total of its regular reserves, allowance for loan and lease losses, special reserves, undivided earnings, accumulated unrealized gains or losses on available-for-sale (AFS) securities, and that portion of year-to-date net income that has not yet been closed to the appropriate capital account. Capital accounts provide (1) a cushion for anticipated and unidentified losses, (2) a base for future growth, and (3) a means by which the

credit union can meet competitive pressures as they arise. Capital provides the credit union a cost-free source of funds.

Documentation Type: