Bank directors may sell shares after unpaid assessments

Bank directors may sell a shareholder’s shares to cover an unpaid assessment. This applies to bank shareholders whose shares have an assessment under section 3807. Directors may sell shares after notice if the shareholder has not paid the assessment within 30 days. Sale proceeds pay reasonable sale costs first, then the assessment, then a secured debt if the lender gives timely notice and reasonable proof. Any remainder goes to the shareholder. The sale must be commercially reasonable. A purchaser acting in good faith, without knowledge of a defect and without collusion, takes the stock free of rights based on an unintentional failure to follow this section or section 3807. The 30-day period runs after notice under section 3807.

A bank with a foreign branch has limited liability for branch contracts and deposits under the described foreign-law rules. This applies to banks with one or more branches in a foreign country, and to contracts and deposits at those branches. The bank is liable for contracts to be performed and deposits to be repaid at a foreign branch no more than a local banking organization would be under that country’s laws. If an authority not recognized by the United States as that territory’s de jure government seizes, destroys, or cancels branch assets, liability for deposits and contracts is reduced in proportion to the value of those assets compared with the branch offices’ total deposit and contract liabilities. The reduction applies when the seizure, destruction, or cancellation occurs.