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Title 12 — Banks and BankingRelease 119-73not60

§51b Dividends, Voting, and Retirement of Preferred Stock; Individual Liability

Title 12 › Chapter 2— NATIONAL BANKS › Subchapter II— CAPITAL, STOCK, AND STOCKHOLDERS › § 51b

Last updated Apr 3, 2026|Official source

Summary

Preferred stockholders get the rights written in the association’s articles (dividends, voting, conversion, retirement, etc.) if the Comptroller of the Currency approves those articles. Preferred holders are not personally responsible for the association’s debts or for assessments to restore its capital. Common stock gets no dividends until preferred dividends are fully paid. If the association is liquidated or a conservator or receiver is appointed, preferred holders must be paid par value plus accumulated dividends before common holders get anything.

Full Legal Text

Title 12, §51b

Banks and Banking — Source: USLM XML via OLRC

(a)Notwithstanding any other provision of law, whether relating to restriction upon the payment of dividends upon capital stock or otherwise, 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 individually 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 voluntary 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.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1980—Subsec. (a). Pub. L. 96–221 struck out limitation on payment of cumulative dividends at a rate not exceeding 6 per centum per annum. 1933—Subsec. (a). Act June 15, 1933, struck out former subsec. (a) and inserted a new subsec. (a) which incorporated all former provisions and inserted “Notwithstanding any other provision of law, whether relating to restriction upon the payment of dividends upon capital 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 Comptroller 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.

Reference

Citations & Metadata

Citation

12 U.S.C. § 51b

Title 12 — Banks and Banking

Last Updated

Apr 3, 2026

Release point: 119-73not60