§ 51639 Loan Insurance Reserve Requirements

• •The agency must keep a savings account for money that hasn't been earned yet, possible losses, and big money problems that might happen because of the economy.
• •The agency can't take too much money out of this savings account. It must always keep a minimum amount in there.
• •If the savings account gets too low, the agency can't make new promises or contracts for loan insurance until the account has enough money again.

Imagine you have a piggy bank for emergencies. You can't spend all the money in it, or you won't have any left when something bad happens.

The agency has a similar rule. They must keep a certain amount of money in their savings account. If they spend too much and the account gets too low, they can't make new deals until they save enough money again.