Whenever the losses of a credit union, resulting from a depreciation in value of its loans or investments or otherwise, exceed its undivided earnings and reserves so that the estimated value of its assets is less than the total amount of share accounts and membership shares and the board of directors determines that the credit union may be subject to involuntary liquidation, the board may propose a reduction in shares. The credit union may, by a majority vote of those voting on the proposition, with the approval of the department, order a reduction in the membership shares and share accounts of each of its shareholders to divide the loss in proportion to the shareholdings held by shareholders in their respective share accounts with such terms as the department may prescribe.

Terms Used In Nebraska Statutes 21-1786

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Credit union: shall mean a cooperative, nonprofit corporation organized under the Credit Union Act for purposes of educating and encouraging its members in the concept of thrift, creating a source of credit for provident and productive purposes, and carrying on such collateral activities as are set forth in the act. See Nebraska Statutes 21-1705
  • Department: shall mean the Department of Banking and Finance. See Nebraska Statutes 21-1706
  • Membership shares: shall mean a balance held by a credit union and established by a member in accordance with standards specified by the credit union. See Nebraska Statutes 21-1716
  • Reserves: shall mean an allocation of retained income and shall include regular and special reserves, except for any allowance for loan or investment losses. See Nebraska Statutes 21-1720
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