1301:9-2-04 Charge-off of uncollectible loans and other losses.

(A) The purpose of the allowance for loan losses is to represent the management’s estimate of loan losses in a credit union’s loan portfolio. The allowance for loan losses will be charged with the amount of uncollectible loans and loan-derived assets which have been authorized for charge-off by the board of directors: likewise, recoveries on loans previously charged-off will be credited to this account.

(B) A record shall be maintained of all loans charged-off. Said record shall contain the following information: account number, name, original date, amount of original loan, security, balance at the time of charge-off; and what, if any, recovery has been made on the security. This record shall be kept current and made available to the examiners at each examination.

(C) Loans should be written-off when they are deemed uncollectible. That practice should be applied consistently in all interim financial reporting periods.

(D) Interest should not be accrued on loans which are doubtful of collection. For this purpose, loans on which payments have not been received for six months or more, should be considered as doubtful of collection.

R.C. 119.032 review dates: 03/17/2006 and 11/15/2010

Promulgated Under: 119.03

Statutory Authority: 1733.41

Rule Amplifies: 1733.

Prior Effective Dates: 2/11/88