---
kind: "section"
citation: "12 C.F.R. § 5.63"
title: "12"
number: "5.63"
heading: "Capital limitation under 12 U.S.C. 56."
url: "https://uscodex.org/cfr/12/5.63"
---

# §5.63. Capital limitation under 12 U.S.C. 56.

- (a) **General limitation.** Except as provided by [12 U.S.C. 59](/usc/12/59.md) and [§ 5.46](/cfr/12/5.46.md), a national bank may not withdraw, or permit to be withdrawn, either in the form of a dividend or otherwise, any portion of its permanent capital. Further, a national bank may not declare a dividend in excess of undivided profits.
- (b) **Preferred stock.** The provisions of [12 U.S.C. 56](/usc/12/56.md) do not apply to dividends on preferred stock. However, if the undivided profits of the national bank are not sufficient to cover a proposed dividend on preferred stock, the proposed dividend constitutes a reduction in capital subject to [12 U.S.C. 59](/usc/12/59.md) and [§ 5.46](/cfr/12/5.46.md).

## Notes

### Authority

Authority: 12 U.S.C. 1 et seq., 24a, 35, 93a, 214a, 215, 215a, 215a-1, 215a-2, 215a-3, 215c, 371d, 481, 1462a, 1463, 1464, 1817(j), 1831i, 1831u, 2901 et seq., 3101 et seq., 3907, and 5412(b)(2)(B).

### Source

Source: 61 FR 60363, Nov. 27, 1996, unless otherwise noted.