Submitted by sevans on Tue, 01/06/2015 - 5:26pm

Prompt corrective action for “undercapitalized” credit unions.

(a) Mandatory supervisory actions by credit union. A federally-insured credit union which is “undercapitalized” must—

(1) Earnings retention. Increase net worth and transfer earnings to its regular reserve account in accordance with §702.201;

(2) Submit net worth restoration plan. Submit a net worth restoration plan pursuant to §702.206, provided however, that a credit union in this category having a net worth ratio of less than five percent (5%) which fails to timely submit such a plan, or which materially fails to implement an approved plan, is classified “significantly undercapitalized” pursuant to §702.102(a)(4)(ii) above;

(3) Restrict increase in assets. Beginning the effective date of classification as “undercapitalized” or lower, not permit the credit union's assets to increase beyond its total assets (per §702.2(j)) for the preceding quarter

 

http://www.ecfr.gov/cgi-bin/text-idx?SID=18208fefa74840c64f9baa71245729d...

Documentation Type: