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HomeFinancial CodeDiv. 1.1Ch. 5Art. 5§ 1174 Commissioner Bank Director Appointment

§ 1174 Commissioner Bank Director Appointment

Financial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 1174 Commissioner Bank Director Appointment

This law lets the state’s commissioner step in like a big shareholder to ask a court to put new directors on a bank’s board.

Key Takeaways

  • •The commissioner is treated as a party in interest for bank director appointments.
  • •The commissioner can sue or join a lawsuit to have permanent directors appointed under Section 306.
  • •The commissioner can also sue or join a lawsuit to have temporary (provisional) directors appointed, just like a 50% shareholder could.

Example

A bank is making risky loans and the state worries about customers losing money.

The commissioner can go to court and ask a judge to appoint new directors (or temporary directors) to run the bank, just as if a shareholder who owned half the bank’s voting shares had asked for the same thing.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 1174 Commissioner Bank Director Appointment

(a) The commissioner shall be deemed to be a party in interest within the meaning of Section 306 of the Corporations Code with respect to a bank and may, in the name of the people of this state, bring or intervene in an action under Section 306 of the Corporations Code for the appointment of directors of a bank. (b) The commissioner may, in the name of the people of this state, bring or intervene in an action under Section 308 of the Corporations Code for the appointment of a provisional director or directors of a bank to the same extent as a shareholder who held 50 percent of the voting power of such bank might bring such an action. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

Last verified: January 10, 2026

Key Terms

party in interestprovisional director

Related Statutes

  • § 1170 Notice Timing Reference
  • § 1171 Bank Trust Company Board Size
  • § 1172 Board Meeting Requirements
  • § 1173 Commissioner Bank Director Election Challenge
  • § 1175 Bank Distribution Violations

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Financial Code. Section 1174.
View Official Source