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Can you summarize IDST Title 26, Chapter 6?
BANKS AND BANKING > RESERVES, SURPLUS AND DIVIDENDS
Short Summary
These legal documents govern the declaration and payment of dividends by banks and the diminution of reserve for banks in Idaho. Banks organized under the laws of Idaho must comply with the reserve requirements of the Federal Reserve Act. No dividend can be declared or paid until a surplus equal to 20% of the paid-in capital stock has been built up. The board of directors can declare a dividend of net profits after the surplus reaches 20% of the common stock, but at least one-fifth of the net profits must be carried to the surplus fund until it reaches 50% of the paid-in common stock. Any excess loss sustained by the bank can be charged to its surplus account but must be reimbursed from earnings. If the surplus fund falls below 20% of the common stock, no further dividends can be declared until the surplus is restored to that amount. Dividends can only be declared and paid in the specified manner until the surplus is restored to 50% of the common stock. Directors who knowingly vote for a dividend in violation of these provisions will be jointly and severally liable civilly for the declared dividends and will also be guilty of a misdemeanor. If a bank’s reserve falls below the required amount for any reporting period, the bank must immediately restore its reserve to the required amount. Penalties for deficiency in reserves include fines of $300 for two nonconsecutive reporting periods, fines equal to 5% of the dollar amount by which the bank was deficient in reserves for the third reporting period or $500, whichever is greater, for three nonconsecutive reporting periods, and the director may proceed as provided in section 26-1115, Idaho Code, for more than three nonconsecutive reporting periods or for two or more consecutive reporting periods in a calendar year.
Whom does it apply to?
Banks organized under the laws of Idaho
What does it govern?
Declaration and payment of dividends by banks, diminution of reserve for banks in Idaho
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
Directors who knowingly vote for a dividend in violation of the provisions will be jointly and severally liable civilly for the declared dividends and will also be guilty of a misdemeanor. For deficiency in reserves, penalties include fines of $300 for two nonconsecutive reporting periods, fines equal to 5% of the dollar amount by which the bank was deficient in reserves for the third reporting period or $500, whichever is greater, for three nonconsecutive reporting periods, and the director may proceed as provided in section 26-1115, Idaho Code, for more than three nonconsecutive reporting periods or for two or more consecutive reporting periods in a calendar year.
Jurisdiction
Idaho