Section 460. Dividends to shareholders; conditions precedent

1. The board
  of directors of any credit union may declare a dividend from the  credit
  union's undivided profits calculated as provided in this article for any
  period determined by the board of directors.
    2. Earnings from all sources for the period for which a dividend is to
  be  paid, except as provided in section four hundred fifty-eight of this
  article, may be credited to the profit and loss account  of  the  credit
  union  and  the following items shall be charged against such account in
  the determination of the amount available for dividends to shareholders:
    (a) All  expenses  paid  or  incurred  by  the  credit  union  in  the
  management   of  its  affairs,  the  collection  of  its  debts  or  the
  transaction of its business.
    (b) The interest paid or accrued on debts owed by the credit union.
    (c) All losses incurred on loans in excess of the allowance  for  loan
  loss account.
    (d)  Any interest collected in advance shall be considered unearned at
  the end of the fiscal period, and shall  be  set  aside  in  an  account
  called "unearned interest".
  The  credit  balance  of  the profit and loss account as thus determined
  shall constitute the undivided profits of the credit union at the  close
  of  such  period,  and  shall  be applicable to the payment of dividends
  except as provided in subdivision three of this section.
    3. No dividend shall be credited or paid unless the credit union has:
    (a) Made good any existing impairment of its capital; and
    (b) Carried to its allowance for loan loss account such  part  of  its
  earnings  as  is  required  by  section  four hundred fifty-nine of this
  article.
    4. Dividends may be paid on shares and share certificates  at  various
  rates with due consideration of the conditions that pertain to each type
  of account such as minimum balance, notice and time requirements.
    5.  When  any  dividend  shall  be  declared  in  excess of the amount
  available for dividends as determined in accordance with the  provisions
  of  this  section,  the  directors  voting for such dividend may be held
  jointly and severally liable to the credit union for the amount  of  the
  excess so declared.