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:

Section 19 of chapter 170 of the General Laws is hereby amended by striking out the first paragraph, as most recently amended by section 151A of chapter 557 of the acts of 1986, and inserting in place thereof the following paragraph:-

No officer or director of a bank shall, except as hereinafter provided, borrow from or otherwise become indebted to the bank of which he is an officer or director, and no bank shall, except as hereinafter provided, make any loan or extend credit in any other manner to any of its own officers or directors; provided, however, that with the prior approval of a majority of the entire board of directors, excluding any member thereof involved in the loan or extension of credit, a bank may loan or extend credit to any such officer and such officer may become indebted to such bank 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 occupied, or is to be occupied, by such officer; or to such director, who is not an officer of such bank, or to such officer so long as the loan is secured by a deposit account in said bank, all subject to the limitations contained in chapter one hundred and sixty-seven E. Such bank shall not give a preferential rate of interest or other preferential terms on any such loan or extension of credit to any such officer or to any such director.