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 1. Paragraph 1 of section 30 of chapter 63 of the General Laws, as appearing in the 1988 Official Edition, is hereby amended by adding the following sentence:- A mutual holding company subject to chapter one hundred and sixty-seven H shall also be considered to be a corporation that is a domestic corporation for purposes of this chapter.

SECTION 2. Chapter 167H of the General Laws is hereby amended by striking out section 1, as so appearing, and inserting in place thereof the following section:-

Section 1. As used in this chapter the following words, unless the context otherwise requires, shall have the following meanings:-

"Commissioner", the commissioner of banks.

"Mutual banking institution", a Massachusetts savings or cooperative bank operating in mutual form.

"Mutual holding company", a mutual banking institution reorganized in accordance with this chapter to hold all or part of the shares of capital stock of a subsidiary banking institution.

"Securities", (a) stock of any kind including without limitation preferred or common stock, (b) securities convertible into or exchangeable for stock of any kind, and (c) warrants, options or other rights for the issuance of stock of any kind or of securities convertible into or exchangeable for stock of any kind.

"Subsidiary banking institution", the banking institution resulting from the reorganization of a mutual banking institution in accordance with section three, all or part of the capital stock of which is held by a mutual holding company.

SECTION 3. Section 7 of said chapter 167H, as so appearing, is hereby amended by striking out clauses (5) and (6) and inserting in place thereof the following three clauses:-

(5) exercise any other power or engage in any activity permitted to a mutual banking institution chartered by the commonwealth;

(6) engage directly or indirectly only in such activities as are now or may hereafter be proper activities for bank holding companies under chapter one hundred and sixty-seven A or by applicable federal law or regulations; and

(7) exercise any rights, waive any rights or take or waive any other action with respect to any securities of any subsidiary banking institution which are held by such mutual holding company.

SECTION 4. Said chapter 167H is hereby further amended by adding the following section:-

Section 11. In addition to its powers under the banking laws, any subsidiary banking institution shall, with the prior approval of the commissioner and subject to such regulations as he may prescribe, have the right to issue any securities as defined in section one and to take or waive any action in connection with any such issuance or otherwise with respect to any such securities; provided, however, that in no event shall the mutual holding company hold less than fifty-one percent of the combined voting power of all classes of securities of the subsidiary banking institution that have voting power in the election of directors of such subsidiary banking institution, and each time securities of the subsidiary banking institution are offered to the general public for a price payable in cash to the subsidiary banking institution, eligible account holders, as defined in the regulations prescribed by the commissioner, shall receive, without payment, nontransferable subscription rights to purchase such securities for the same price in the manner and to the extent set forth in such regulations. For purposes of this chapter an offer to the general public shall mean an offer to investors generally. It shall not include an offering in connection with an employee stock option or other employee benefit plan, an offering to the holders of convertible or other securities of the subsidiary banking institution, an offering in connection with a merger, acquisition or reorganization or any other similar limited offering.

From and after the time that securities of the subsidiary banking institution have been sold to the general public, there shall be at least two directors of the subsidiary banking institution who are independent and do not serve as an officer, director or employee of, and or not otherwise affiliated with, the mutual holding company or any other subsidiary or affiliate of the mutual holding company.

SECTION 5. Notwithstanding the provisions of any general or special law to the contrary, any trust company organized under chapter one hundred and seventy-two of the General Laws or any national banking association with its principal place of business in the commonwealth shall be exempt from acquisition by a mutual holding company, established pursuant to chapter one hundred and sixty-seven H of the General Laws, or by any subsidiary bank thereof until July first, nineteen hundred and ninety-two; provided, however, that such exemption shall be accomplished by a resolution adopted by a two-thirds vote of its board of directors and a two-thirds vote of its stockholders and by filing a certified copy of such resolution and vote with the commissioner of banks.

SECTION 6. Chapter 102 of the acts of 1990 is hereby amended by striking out section 43 and inserting in place thereof the following section:-

Section 43. A trust company, savings bank or cooperative bank chartered by the commonwealth, a national banking association, federal savings and loan association or federal savings bank which has its main office located in the commonwealth, or a bank holding company as defined in the Bank Holding Company Act of 1956 (12 USC 1841 et seq.) or a saving and loan holding company as defined in Section 408 of the National Housing Act (12 USC 1730a) whose principal place of business is in the commonwealth or deemed to be such a bank holding company under section forty-four may, by resolution adopted by a two-thirds vote of its directors or trustees, exempt itself from the provisions of sections eleven to sixteen, inclusive, of this act until July first, nineteen hundred and ninety-two, by filing a certified copy of such resolution and vote with the commissioner of banks; provided, however, that any such exemption shall not apply to acquisitions, purchases or mergers between such entitites and banking institutions as defined in section one of chapter one hundred and sixty-seven A of the General Laws which have their principal place of business in the commonwealth or in the state of Connecticut, Maine, New Hampshire, Rhode Island or Vermont and which are not directly or indirectly owned or controlled by a banking institution or holding company which has its principal place of business in a state other than the commonwealth or the states named herein, or between such entitites and bank holding companies or saving and loan holding companies, as defined above, which have their principal place of business in said states and which are not directly or indirectly owned or controlled by a banking institution or holding company which has its principal place of business in a state other than the commonwealth or the states named herein; and provided, further, that any of said entities which has so exempted itself, as provided herein, may, by resolution adopted by a two-thirds vote of its board of directors or trustees prior to said date of July first, nineteen hundred and ninety-two, rescind such exemption by filing a certified copy of such resolution and vote with the commissioner of banks, whereupon such rescission from said exemption shall take effect and shall be irrevocable.

SECTION 7. The provisions of section six shall take effect as of July sixth, nineteen hundred and ninety.