12 U.S.C. § 59

Reduction of capital

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(a) In general

Subject to the approval of the Comptroller of the Currency, a national banking association may, by a vote of shareholders owning, in the aggregate, two-thirds of its capital stock, reduce its capital.

(b) Shareholder distributions authorized

As part of its capital reduction plan approved in accordance with subsection (a), and with the affirmative vote of shareholders owning at least two thirds of the shares of each class of its stock outstanding (each voting as a class), a national banking association may distribute cash or other assets to its shareholders.

(R.S. § 5143; Dec. 23, 1913, ch. 6, § 28, 38 Stat. 274; Aug. 23, 1935, ch. 614, title III, § 334, 49 Stat. 720; Pub. L. 109–351, title III, § 304, Oct. 13, 2006, 120 Stat. 1970.)Editorial NotesCodification

R.S. § 5143 derived from act June 3, 1864, ch. 106, § 13, 13 Stat. 103, which was the National Bank Act. See section 38 of this title.

Amendments

2006—Pub. L. 109–351 amended section generally. Prior to amendment, section read as follows: “Any association formed under title 62 of the Revised Statutes may, by the vote of shareholders owning two-thirds of its capital stock, reduce its capital to any sum not below the amount required by title 62 of the Revised Statutes to authorize the formation of associations; but no such reduction shall be allowable which will reduce the capital of the association below the amount required for its outstanding circulation, nor shall any reduction be made until the amount of the proposed reduction has been reported to the Comptroller of the Currency and such reduction has been approved by said Comptroller of the Currency and no shareholder shall be entitled to any distribution of cash or other assets by reason of any reduction of the common capital of any association unless such distribution shall have been approved by the Comptroller of the Currency and by the affirmative vote of at least two-thirds of the shares of each class of stock outstanding, voting as classes.”

1935—Act Aug. 23, 1935, substituted “and no shareholder shall be entitled to any distribution of cash or other assets by reason of any reduction of the common capital of any association unless such distribution shall have been approved by the Comptroller of the Currency and by the affirmative vote of at least two-thirds of the shares of each class of stock outstanding, voting as classes” for “and by the Federal Reserve Board or by the organization committee pending the organization of the Federal Reserve Board”.

Notes of Decisions

Cited in 3 cases, 1973–1990 · leading case: Bloomington National Bank v. Telfer

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Bloomington National Bank v. Telfer (1988) insd · cites it 5× “The Comptroller argues that another banking statute, 12 U.S.C. § 59 , which permits a national bank to remit cash to shareholders in reducing its capital, applies instead.”

United States v. Connecticut National Bank (1973) ctd “The use of any of the capital of an existing national bank, such as CNB, for the organization of a new national bank by means of the “holding company route”, or otherwise, requires the approval of the Comptroller pursuant to 12 U.S.C. § 59 . (Tr. 1558-1559). 197. Should a…”

Bloomington National Bank v. Telfer (1990) ca7 “12 U.S.C. § 59 (1988). Bloomington’s reliance on this section is misplaced.”

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