Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately regulate interstate banking, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

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

SECTION 1. Chapter 167 of the General Laws is hereby amended by striking out section 38, as appearing in the 1986 Official Edition, and inserting in place thereof the following section:-

Section 38. No out-of-state banking association or corporation, except as provided herein, shall transact banking business in the commonwealth other than as provided for in chapter one hundred and sixty-seven B; provided, however, that the board of bank incorporation may, conditioned upon the performance of such requirements as to auditing as the board may prescribe, grant a certificate authorizing the same to any such association or corporation with its principal place of business in one of the states of Connecticut, Maine, New Hampshire, Rhode Island or Vermont or in a country other than the United States and which is not controlled by a bank holding company with its principal place of business in any state other than in the commonwealth or in one of the states mentioned herein.

Any such association or corporation transacting banking business in this commonwealth pursuant to such certificate shall be subject to the supervision of the commissioner, and shall annually, within thirty days after the last business day of December, and at other times during each year on any past day to be specified by the commissioner, make to him in such form as may be prescribed by him a return, signed and sworn to by the treasurer, or the corresponding officer, of the corporation, showing accurately the condition thereof at the close of business on said day. The president and a majority of the directors shall certify on oath that the report is correct according to their best knowledge and belief.

For the purposes of this section and sections thirty-nine to forty-two, inclusive, (i) the term "Massachusetts bank" shall mean any federally or state-chartered banking institution with its principal place of business in the commonwealth, and (ii) the term "bank holding company" and the concept of control shall have the same meaning as set forth in the Bank Holding Company Act of 1956 (12 USC 1841 et seq.) and said term "bank holding company" shall also include any savings and loan holding company as defined in Section 408 of the National Housing Act (12 USC1730a).

SECTION 2. Said chapter 167 is hereby further amended by striking out section 39, as so appearing, and inserting in place thereof the following section:-

Section 39. Any out-of-state banking association or corporation with its principal place of business in one of the states of Connecticut, Maine, New Hampshire, Rhode Island or Vermont or in a country other than the United States and which is not controlled by a bank holding company with its principal place of business in any state other than in the commonwealth or in one of the states mentioned herein doing a business similar to any business referred to in section one pursuant to a certificate issued by the board of banking incorporation in accordance with section thirty-eight may establish and maintain branch offices or depots in the commonwealth, or merge with or purchase the assets or stock of any Massachusetts bank, if such banking association or corporation is expressly authorized to do so by the laws under which it is organized and operates; provided, however, that the laws of the state in which such banking association or corporation has its principal place of business expressly authorized, under conditions no more restrictive than those imposed by this chapter as determined by the commissioner, Massachusetts banks to establish and maintain branches and depots in such state or to merge with or purchase the assets of a banking institution in such state. Such banking association or corporation shall establish and maintain branches or depots in the commonwealth, or merge with or purchase the assets of a Massachusetts bank, in accordance with the same laws which govern such activities by Massachusetts banks; provided, however, that the initial branch office other than one established pursuant to chapter one hundred and sixty-seven B, or, if more than one, the branch deemed to be the initial office by such association or corporation, shall be considered the main office in the commonwealth for the purposes of determining the geographical limitations on the establishment of branch offices; and provided, further, that in any merger or purchase in which the out-of-state banking association or corporation is the continuing entity such association shall be exempt from the provisions of sections forty to forty-two, inclusive.

For the purposes of this section and sections forty to forty-two, inclusive, the words "out-of-state banking association or corporation" shall mean an association or corporation with its principal place of business in one of the states of Connecticut, Maine, New Hampshire, Rhode Island or Vermont or in a country other than the United States and which is not controlled by a bank holding company with its principal place of business in any state other than in the commonwealth or in one of the states mentioned herein.

SECTION 3. The second paragraph of section 2 of chapter 167A of the General Laws, as so appearing, is hereby amended by striking out the last sentence and inserting in place thereof the following two sentences:- For the purposes of this section, the term "out-of-state bank holding company" shall have the same meaning as set forth in the Bank Holding Company Act of 1956 12 USC 1841 et seq. and the term "bank holding company" shall also include any savings and loan holding company as defined in Section 408 of the National Housing Act 12 USC 1730a but shall include only a bank holding company (i) which has its principal place of business in the state of Connecticut, Maine, New Hampshire, Rhode Island or Vermont, (ii) each of whose subsidiary banks has its main office and principal place of business only in the commonwealth or in one of the said states, and (iii) which is not directly or indirectly owned or controlled by a bank holding company which (a) has its principal place of business in any state other than the commonwealth or the state of Connecticut, Maine, New Hampshire, Rhode Island or Vermont, or (b) owns or controls any subsidiary bank which has its main office or principal place of business in any state other than such states. If any such out-of-state bank holding company, by virtue of any action, ceases to be an out-of-state bank holding company, as defined herein, and it does not become a bank holding company established in accordance with this chapter, the board of banking incorporation shall order such bank holding company to immediately divest itself of its direct or indirect ownership or control of any banking institution in the commonwealth acquired by it pursuant to this section.

SECTION 4. Notwithstanding the provisions of section three of this act, an out-of-state bank holding company, as defined in the second paragraph of section two of chapter one hundred and sixty-seven A of the General Laws, which on the effective date of this section owns or controls any subsidiary bank whose main office or principal place of business is in the commonwealth shall not be required to divest its ownership or control of such subsidiary bank solely by virtue of its acquisition of ownership or control directly or indirectly under definitive agreements in existence on the effective date of this section of a subsidiary bank whose main office or principal place of business is not in the commonwealth or the state of Connecticut, Maine, New Hampshire, Rhode Island or Vermont.

SECTION 5. Sections one, two, and three of this act shall take effect as of July first, nineteen hundred and eighty-three.