§ 56. — Prohibition on withdrawal of capital; unearned dividends.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC56]
TITLE 12--BANKS AND BANKING
CHAPTER 2--NATIONAL BANKS
SUBCHAPTER II--CAPITAL, STOCK, AND STOCKHOLDERS
Sec. 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withdrawn, either in the form of dividends or otherwise, any portion of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. Sec. 5204; Pub. L. 103-325, title VI, Sec. 602(h)(1), Sept. 23,
1994, 108 Stat. 2294.)
Codification
R.S. Sec. 5204 derived from act June 3, 1864, ch. 106, Sec. 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.''
Section Referred to in Other Sections
This section is referred to in section 324 of this title.
