Sec. 1.6. Trust company—imposition of service charges on unclaimed dividends

A trust company inquired whether it was permissible to impose service charges on dividends declared on its own capital stock but not claimed by stockholders. The department responded that it found no statutory provision allowing this practice. Moreover, a declared dividend is a debt owed by the trust company to its stockholders and, absent specific contractual authorization to reduce the debt by imposing charges, the trust company may not do so. Characterizing the trust company, once it segregates the dividend monies, as a trustee for the benefit of its stockholders does not alter the conclusion that the practice is impermissible.

The department was not asked to, and did not, express any opinion as to the legality of charges, by-law or other provision of prospective application attempting to exact such charges on unclaimed dividends.

DATED: August 24, 1973