§51a Preferred Stock; Issuance Authorized

Summary

A national bank can issue preferred stock if the Comptroller of the Currency approves and shareholders who own a majority of the stock vote for it after at least five days’ notice sent by registered or certified mail as directed by the board. The bank may change its articles of association if needed. New banks that have not yet issued common stock do not need the shareholder notice or vote. The preferred stock is not valid until the full par value is paid and a notarized notice signed by the bank’s president, vice president, or cashier is sent to the Comptroller. The Comptroller must then issue a certificate stating the amount issued, that he approves it, and that the money was paid in as capital; that certificate proves the stock was validly issued.