12 U.S.C. § 60

National bank dividends

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(a) In general

Subject to subsection (b), the directors of any national bank may declare a dividend of so much of the undivided profits of the bank as the directors judge to be expedient.

(b) Approval required under certain circumstances

A national bank may not declare and pay dividends in any year in excess of an amount equal to the sum of the total of the net income of the bank for that year and the retained net income of the bank for the preceding 2 years, minus the sum of any transfers required by the Comptroller of the Currency and any transfers required to be made to a fund for the retirement of any preferred stock, unless the Comptroller of the Currency approves the declaration and payment of dividends in excess of such amount.

(R.S. § 5199; Aug. 23, 1935, ch. 614, title III, § 315, 49 Stat. 712; Pub. L. 86–230, § 21(a), Sept. 8, 1959, 73 Stat. 465; Pub. L. 103–325, title VI, § 602(h)(2), Sept. 23, 1994, 108 Stat. 2294; Pub. L. 109–351, title III, § 302(a), Oct. 13, 2006, 120 Stat. 1970.)Editorial NotesCodification

R.S. § 5199 derived from act June 3, 1864, ch. 106, § 33, 13 Stat. 109, 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 related to periodic declarations of dividends subject to certain surplus fund requirements and to the approval of the Comptroller of the Currency in certain situations.

1994—Subsec. (a). Pub. L. 103–325, § 602(h)(2)(A), (B), substituted “undivided profits of the association, subject to the limitations in subsection (b) of this section,” for “net profits of the association” in first sentence and “net income” for “net profits” wherever subsequently appearing.

Subsec. (b). Pub. L. 103–325, § 602(h)(2)(B), substituted “net income” for “net profits” in two places.

Subsec. (c). Pub. L. 103–325, § 602(h)(2)(C), struck out subsec. (c) which read as follows: “For the purpose of this section the term ‘net profits’ shall mean the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets, after deducting from the total thereof all current operating expenses, actual losses, accrued dividends on preferred stock, if any, and all Federal and State taxes.”

1959—Pub. L. 86–230 designated existing provisions as subsec. (a), authorized the declaration of dividends, quarterly and annually, when at least one-tenth of the bank’s net profits of the preceding half year or of the preceding two consecutive half-year periods has been carried to the surplus fund, respectively, and added subsecs. (b) and (c).

1935—Act Aug. 23, 1935, among other changes, inserted proviso.

Notes of Decisions

Cited in 5 cases, 1940–2013 · leading case: Corbin v. Franklin National Bank (In Re Franklin National Bank Securities Litigation)

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Corbin v. Franklin National Bank (In Re Franklin National Bank Securities Litigation) (1979) nyed · cites it 2× “Under the National Bank Act, FNB was prohibited from paying dividends to FNYC in the absence of earnings ( 12 U.S.C. § 60 (b)), and the Comptroller’s regulations absolutely prohibit any dividend that would “impair capital” ( 12 C.”

In Re Franklin National Bank Securities Litigation (1979) nyed “§§ 51a, 51b, 51b-l, 57 & 59, or increases in its declared dividends, 12 U.S.C. § 60 , also require his approval.”

Federal Deposit Ins. Corporation v. Mason (1940) ca3 “§ 5199, 12 U.S.C.A. § 60 ), but prohibits dividends to be made if losses have been sustained equal to undivided profits, or in excess of net profits on hand after deducting losses and bad debts, or payable out of capital (R.”

Federal Deposit Insurance v. Benson (1994) txsd “§ 29 , 12 U.S.C. § 60 , and 12 U.S.C. § 1972 . Therefore Defendants are liable under 12 U.”

Barbatano v. Glickman (In re Corus Bankshares, Inc.) (2013) ilnb · cites it 2× “Count V claims that Defendants caused CBI to issue dividends in violation of § 60 of the National Bank Act, 12 U.S.C. § 60 . Id. at ¶¶ 122-29 . Count VI, for money had and received, seeks to require Glickman to return the money paid to him as a CBI shareholder as a result of…”

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