§288 Cancellation of Stock Held by Member Bank on Insolvency or Discontinuance of Banking Operations for Sixty Days; Repayment of Cash-paid Subscriptions

Summary

If a member bank is declared insolvent and a receiver is appointed, it loses its Federal Reserve stock but still keeps any liability. The cash the bank paid for those shares, plus 0.5% per month from the last dividend if earned (but not more than the book value), must first be used to pay what the bank owes the Federal Reserve; any remainder goes to the receiver. If a national bank stops operations for sixty days and is not already in liquidation or under a receiver, the Comptroller may appoint a receiver and the same cancellation and payment rules apply under rules set by the Board of Governors.