Session Laws

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

Chapter 168 of the General Laws is hereby amended by striking out section 19, as appearing in the 1984 Official Edition, and inserting in place thereof the following section:-

Section 19. No such corporation shall, except as hereinafter provided, make any loan or extend credit in any other manner to any or its operating officers or to any of its trustees, including a member of its board of investment, and no such operating officer or such trustee shall, except as hereinafter provided, borrow from or otherwise become indebted to such corporation or be surety for loans by it to others or, directly or indirectly, whether acting individually or as trustee holding property in trust for another person, be an obligor for money borrowed of the corporation; provided, however, that with the prior approval of a majority of the entire board of investment, excluding any member thereof involved in the loan or extension of credit, such corporation may make a loan or extend credit to such operating officer in an amount not exceeding twenty thousand dollars on a loan or extension of credit, secured or unsecured and in an amount not exceeding sixty thousand dollars on a loan or extension of credit intended or secured for educational purposes, and in an amount not exceeding one hundred and fifty thousand dollars on a loan secured by a mortgage on real estate improved with a single family dwelling which is, or is to be, occupied by such operating officer, or to such trustee, who is not an operating officer of such corporation, subject to the limitations contained in chapter one hundred and sixty-seven E. Such corporation shall not give a preferential rate of interest or other preferential terms on any such loan or extension of credit to any such operating officer or to any such trustee. Any loans or extensions of credit made hereunder shall be subject to the provisions of section twenty.

No operating officer, whether acting individually or as trustee holding property in trust for another person, shall become the owner of real estate upon which a mortgage is held by the corporation; provided, however, that this prohibition shall not apply to any operating officer who becomes the owner of real estate upon which a mortgage is held by the corporation securing a loan in an amount not exceeding one hundred and fifty thousand dollars on real estate improved with a single family dwelling which is occupied or which is to be occupied by such operating officer. The provisions of this section shall not apply to loans made to any operating officer on deposit books, or to loans as are guaranteed or insured in whole or in part as authorized by chapter forty-six of the acts of nineteen hundred and forty-five or by any regulations thereunder.