Immediately before the payment of each dividend, the gross earnings of the credit union shall be determined. From this amount, there shall be set aside as a regular reserve for contingencies in accordance with the following schedule:

(1) A credit union in operation for more than four years and having assets of five hundred thousand dollars or more shall set aside:

(a) ten percent of gross income until the regular reserve shall equal four percent of the total outstanding nonshare secured loans and risk assets;

(b) five percent of gross income until the regular reserve shall equal six percent of the total outstanding nonshare secured loans and risk assets.

(2) A credit union in operation less than four years or having assets of less than five hundred thousand dollars shall set aside:

(a) ten percent of gross income until the regular reserve shall equal seven and one-half percent of the total outstanding nonshare secured loans and risk assets; and

(b) five percent of gross income until the regular reserve shall equal ten percent of the total outstanding nonshare secured loans and risk assets.

(3) Whenever the regular reserve falls below the level required by regulation, it shall be replenished by regular contributions in such amounts as may be needed to maintain the required level.

(4) The Board of Financial Institutions may decrease or waive entirely the reserve requirement for an individual credit union in one or more accounting periods having determined such action is necessary or desirable.