§288 Cancellation of stock held by member bank on insolvency or discontinuance of banking operations for sixty days; repayment of cash-paid subscriptions

Summary

When a member bank is declared insolvent and a receiver is named, the bank’s stock in its Federal Reserve Bank is canceled. That cancelation does not reduce the bank’s liability. The cash the bank paid for those shares, plus 0.5% per month from the date of the last dividend if earned (but not more than the book value), is first used to pay any debts the bank owes to the Federal Reserve Bank. Any remainder goes to the receiver. If a national bank stops banking for 60 days and is not already in liquidation or under a receiver, the Comptroller of the Currency may appoint a receiver. The bank’s Federal Reserve Bank stock is then canceled, and the bank is paid, under rules set by the Board of Governors of the Federal Reserve System, an amount equal to its cash-paid share payments plus 0.5% per month from the last dividend if earned (not exceeding book value), minus any debt it owes to the Federal Reserve Bank.