Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately clarify the authority of the board of bank incorporation, 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. The first paragraph of section 2 of chapter 167A of the General Laws, as appearing in the 1992 Official Edition, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- Except with the prior written approval of the board of bank incorporation (1) no company shall become a bank holding company; (2) no bank holding company owning, controlling or holding with the power to vote, directly or indirectly, twenty-five per centum or more of the voting stock of each of two or more banking institutions or, in the case of a bank holding company which is itself a banking institution owning, controlling or holding with power to vote, directly or indirectly, twenty-five per centum or more of the voting stock of one or more banking institutions shall (a) acquire direct or indirect ownership or control of any additional voting stock in any such banking institution or (b) acquire direct or indirect ownership or control of any voting stock in any other banking institution if, after such acquisition, such bank holding company will, directly or indirectly, own or control more than five per centum of the voting stock thereof; (3) no bank holding company or affiliate thereof, other than a banking institution, shall acquire all or substantially all of the assets of a banking institution; and (4) no bank holding company shall merge or consolidate with any other bank holding company.

SECTION 2. Section four A of said chapter one hundred and sixty-seven A is hereby repealed.

SECTION 3. Section 34C of chapter 168 of the General Laws, as appearing in the 1992 Official Edition, is hereby amended by inserting after the word "twenty-six A", in line 17, the following word:- , twenty-six B.

SECTION 4. Section 26C of chapter 170 of the General Laws, as so appearing, is hereby amended by inserting after the word "twenty-six A", in line 18, the following word:- , twenty-six B.

SECTION 5. Chapter 172 of the General Laws is hereby amended by inserting after section 26A, as so appearing, the following section:-

Section 26B. A company having capital stock divided into shares which desires to acquire all the capital stock of any such corporation shall, together with such corporation, submit, in duplicate, to the commissioner a written plan of acquisition of such stock. Such plan shall be in form satisfactory to the commissioner, shall specify the corporation the stock of which is to be acquired by the company shall prescribe the terms and conditions of the acquisition and the mode of carrying it into effect, including the manner of exchanging the shares of the corporation for shares or other securities of the company. Any such plan may provide for the payment of cash in lieu of the issuance of fractional shares of the company. At the time of submitting said written plan of acquisition, an investigation fee, the amount of which shall be determined annually by the commissioner of administration under the provisions of section three B of chapter seven, shall be paid to the commissioner of banks by the company.

There shall also be submitted, in duplicate, with said plan of acquisition of stock, a certificate of the president or clerk or secretary of the company, certifying that such plan has been approved by the board of directors or other governing body of his company by a majority vote of all the members thereof, and a certificate of the president, secretary or treasurer of each corporation, the acquisition of all the capital stock of which is provided for, certifying that such plan has been approved by the board of directors of his corporation by a majority vote of all the members thereof, and that such plan was thereafter submitted to the stockholders of such corporation at a meeting thereof held upon notice of at least fifteen days, specifying the time, place and object of such meeting and addressed to each stockholder at the address appearing upon the books of the corporation and published at least once a week for two successive weeks in one newspaper in the county in which such corporation has its principal place of business and that such plan has been approved at such meeting by the vote of stockholders owning at least two-thirds in amount of the stock of such corporation.

The commissioner shall examine the plan of acquisition of stock so submitted, and after making such investigation thereof as he deems appropriate he shall, within sixty days after receipt thereof approve or disapprove such plan of acquisition in case such company is not, and would not upon the effectiveness of such plan become, a bank holding company. In approving any such plan, the commissioner may attach such conditions thereto as he deems advisable.

If the commissioner finds that competition among banking institutions will not be unreasonably affected and that public convenience and advantage will be promoted he shall approve such plan of acquisition, and shall endorse his approval thereon and a copy of the plan bearing such endorsement shall be filed within thirty days thereafter in the office of the commissioner. Upon such filing, the plan, and the acquisition provided for therein, shall become effective, unless a later date is specified in the plan, in which event the plan and such acquisition shall become effective upon such later date.

A stockholder of any such corporation which shall have approved such plan of acquisition, who objects to such action, in the manner provided in section eighty-six of chapter one hundred and fifty-six B, shall be entitled, if such plan shall have become effective, to demand payment for his stock from such corporation and an appraisal thereof in accordance with the provisions of sections eighty-six to ninety-eight, inclusive, of chapter one hundred and fifty-six B, which provisions, as modified for the purposes of this paragraph by the provisions hereof, are hereby made applicable in all such cases, and such stockholder and such corporation shall have the rights and duties and follow the procedure set forth in said sections.

Any corporation organized under or subject to the provisions of chapter one hundred and sixty-eight, one hundred and seventy or one hundred and seventy-two shall have the power to organize a company for the purposes contemplated by this section; and in connection with such organization and the development of a plan of acquisition, any such corporation may incur organization and other expenses in such amounts, in the aggregate, not exceeding two percent of its capital stock, surplus account and undivided profits as the commissioner may approve.

Any such company shall engage directly or indirectly only in such activities as are now or may hereafter be proper activities for bank holding companies registered under the Federal Bank Holding Company Act of 1956, including, without limiting the generality of the foregoing, the issuance and sale of commercial paper and acquiring, managing or controlling corporations organized under or subject to the provisions of chapter one hundred and sixty-eight, one hundred and seventy or one hundred and seventy-two.

The provisions of section twenty-six A shall not apply to an acquisition under this section. A company which acquires any such corporation under this section shall be deemed a bank holding company subject to the provisions of section five of chapter one hundred and sixty-seven A. For the purposes of this section, the word "company" shall have the same meaning as defined in subparagraph (c) of section one of chapter one hundred and sixty-seven A.

SECTION 6. Section 2 of chapter 255B of the General Laws, as appearing in the 1992 Official Edition, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- No person, other than a bank as defined in section one of chapter one hundred and sixty-seven, a national banking association, federal savings bank, federal savings and loan association, federal credit union, or any bank, trust company, savings bank, savings and loan association or credit union organized under the laws of any other state of the United States, shall engage in the business of a sales finance company without first obtaining from the commissioner a license to carry on said business in the city or town where the business is to be transacted as provided herein.