12 U.S.C. § 51b — Dividends, voting, and retirement of pre-

Page 33 TITLE 12—BANKS AND BANKING § 51b–1 which certificate shall be deemed to be conclu- sive evidence that such preferred stock has been duly and validly issued. (Mar. 9, 1933, ch. 1, title III, § 301, 48 Stat. 5; June 15, 1933, ch. 79, 48 Stat. 147; Aug. 23, 1935, ch. 614, title III, § 336, 49 Stat. 720; Pub. L. 86–507, § 1(9), June 11, 1960, 74 Stat. 200.) Editorial Notes AMENDMENTS 1960—Pub. L. 86–507 inserted ‘‘or by certified mail’’ after ‘‘registered mail’’. 1935—Act Aug. 23, 1935, amended last sentence gen- erally. 1933—Act June 15, 1933, struck out all of former sec- tion and inserted a new section which incorporated all former provisions and inserted ‘‘of one or more class- es,’’ in first sentence. Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller of the Currency, referred to in this section, not included in transfer of functions to Secretary of the Treasury, see note set out under section 1 of this title. § 51b. Dividends, voting, and retirement of pre- ferred stock; individual liability (a) Notwithstanding any other provision of law, whether relating to restriction upon the payment of dividends upon capital stock or oth- erwise, the holders of such preferred stock shall be entitled to receive such cumulative dividends and shall have such voting and conversion rights and such control of management, and such stock shall be subject to retirement in such manner and upon such conditions, as may be provided in the articles of association with the approval of the Comptroller of the Currency. The holders of such preferred stock shall not be held individ- ually responsible as such holders for any debts, contracts, or engagements of such association, and shall not be liable for assessments to restore impairments in the capital of such association as now provided by law with reference to holders of common stock. (b) No dividends shall be declared or paid on common stock until the cumulative dividends on the preferred stock shall have been paid in full; and, if the association is placed in vol- untary liquidation or a conservator or a receiver is appointed therefor, no payments shall be made to the holders of the common stock until the holders of the preferred stock shall have been paid in full the par value of such stock plus all accumulated dividends. (Mar. 9, 1933, ch. 1, title III, § 302, 48 Stat. 5; June 15, 1933, ch. 79, 48 Stat. 148; Pub. L. 96–221, title VII, § 702, Mar. 31, 1980, 94 Stat. 186.) Editorial Notes AMENDMENTS 1980—Subsec. (a). Pub. L. 96–221 struck out limitation on payment of cumulative dividends at a rate not ex- ceeding 6 per centum per annum. 1933—Subsec. (a). Act June 15, 1933, struck out former subsec. (a) and inserted a new subsec. (a) which incor- porated all former provisions and inserted ‘‘Notwith- standing any other provision of law, whether relating to restriction upon the payment of dividends upon cap- ital stock or otherwise’’ and ‘‘and conversion rights,’’ in first sentence. Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller of the Currency, referred to in this section, not included in transfer of functions to Secretary of the Treasury, see note set out under section 1 of this title. § 51b–1. Consideration of preferred stock in de- termining impairment of capital; dividends; retirement If any part of the capital of a national bank, State member bank, or bank applying for mem- bership in the Federal Reserve System consists of preferred stock, the determination of whether or not the capital of such bank is impaired and the amount of such impairment shall be based upon the par value of its stock even though the amount which the holders of such preferred stock shall be entitled to receive in the event of retirement or liquidation shall be in excess of the par value of such preferred stock. If any such bank or trust company shall have out- standing any capital notes or debentures of the type which the Reconstruction Finance Corpora- tion is authorized to purchase pursuant to the provisions of section 51d of this title, the capital of such bank may be deemed to be unimpaired if the sound value of its assets is not less than its total liabilities, including capital stock, but ex- cluding such capital notes or debentures and any obligations of the bank expressly subordi- nated thereto. Notwithstanding any other provi- sion of law, the holders of preferred stock issued by a national banking association pursuant to the provisions of the Emergency Banking and Bank Conservation Act, approved March 9, 1933, as amended, shall be entitled to receive such cu- mulative dividends on the purchase price re- ceived by the association for such stock and, in the event of the retirement of such stock, to re- ceive such retirement price, not in excess of such purchase price plus all accumulated divi- dends, as may be provided in the articles of asso- ciation with the approval of the Comptroller of the Currency. If the association is placed in vol- untary liquidation, or if a conservator or a re- ceiver is appointed therefor, no payment shall be made to the holders of common stock until the holders of preferred stock shall have been paid in full such amount as may be provided in the articles of association with the approval of the Comptroller of the Currency, not in excess of such purchase price of such preferred stock plus all accumulated dividends. (Aug. 23, 1935, ch. 614, title III, § 345, 49 Stat. 722; Pub. L. 96–221, title VII, § 703, Mar. 31, 1980, 94 Stat. 186.) Editorial Notes REFERENCES IN TEXT Section 51d of this title, referred to in text, which was section 304 of the Emergency Banking and Bank Conservation Act, approved March 9, 1933, ch. 1, 48 Stat. 6, as amended, and which authorized the Reconstruc- tion Finance Corporation, upon the request of the Sec- retary of the Treasury approved by the President, to