CA Fin Code Section 1406


(a)

In this section:

(1)

“Creditor” includes, but is not limited to, a depositor.

(2)

“Insolvency,” when used with respect to a bank, means that the bank is unable to pay its debts as they come due.

(b)

This section does not apply to any of the following:

(1)

Any transaction authorized under Section 1463 or 1465.

(2)

Any transaction made by a bank in the ordinary course of its business.

(c)

No bank may pay or secure a creditor if the bank does so (1) after committing an act of insolvency or in contemplation of insolvency and (2) with a view to preventing the application of its assets in the manner prescribed in Chapter 7 (commencing with Section 600) of Division 1 or with a view to the preference of one creditor to another.

(d)

Any transaction made by a bank in violation of this section is void.
Last Updated

Aug. 19, 2023

§ 1406’s source at ca​.gov