Prohibition on withdrawal of capital; unearned dividends

  1. Law
  2. USC 12
  3. Banks And Banking
  4. NATIONAL BANKS
  5. CAPITAL, STOCK, AND STOCKHOLDERS
  6. Prohibition on withdrawal of capital; unearned dividends

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§56. Prohibition on withdrawal of capital; unearned dividends

No association, or any member thereof, shall, during the time it shall continue its banking operations, withdraw, or permit to be withdrawn, either in the form of dividends or otherwise, any portion of its capital. If losses have at any time been sustained by any such association, equal to or exceeding its undivided profits then on hand, no dividend shall be made; and no dividend shall ever be made by any association, while it continues its banking operations, to an amount greater than its undivided profits, subject to other applicable provisions of law. But nothing in this section shall prevent the reduction of the capital stock of the association under section 59 of this title.

(R.S. §5204; Pub. L. 103–325, title VI, §602(h)(1), Sept. 23, 1994, 108 Stat. 2294 .)

Codification

R.S. §5204 derived from act June 3, 1864, ch. 106, §38, 13 Stat. 110 , which was the National Bank Act. See section 38 of this title.

Amendments

1994-Pub. L. 103–325 substituted "undivided profits, subject to other applicable provisions of law" for "net profits then on hand, deducting therefrom its losses and bad debts" in second sentence and struck out after second sentence "All debts due to any associations, on which interest is past due and unpaid for a period of six months, unless the same are well secured, and in process of collection, shall be considered bad debts within the meaning of this section."


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