Bill H.1016

HOUSE DOCKET, NO. 3127 FILED ON: 1/14/2009

HOUSE . . . . . . . . . . . . . . . No. 1016

The Commonwealth of Massachusetts

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In the Year Two Thousand Nine

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An Act relative to the conversion of a Massachusetts chartered bank or credit union to a federal or other charter..

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. Section 36 of chapter 168 of the General Laws, as appearing is the 2006 Official Edition, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraphs:—

Upon the affirmative vote of two-thirds of the corporators who vote on the proposal, a savings bank may convert, subject to this section, into a savings bank or savings and loan association chartered under the laws of the United States.

The board of trustees, by an affirmative vote of two-thirds of the entire board, shall approve any plan of conversion and submit the plan to the commissioner for his review. Included with the plan shall be an information statement to be sent to corporators which shall fully and fairly disclose all significant terms and steps to be taken for the conversion and shall include but not be limited to:

(a) a statement as to why the board is considering the conversion.

(b) a statement of the major positive and negative business effects of the proposed conversion.

The commissioner may require changes to the plan of conversion and information statement. The commissioner may also require any equitable disclosure he determines applicable to the transaction. The commissioner may specify the form, type and other material aspects of the plan of reorganization and information statement to be sent to members. The commissioner shall review the contents of the plan before the board of trustees presents the conversion plan to the corporators for a vote. The commissioner shall approve the contents of the conversion plan and information statement only if the commissioner is satisfied of all of the following:

(a) The plan discloses to the corporators information concerning the advantages and disadvantages of the proposed conversion.

(b) The information statement discloses the impact on the depositors’ financial and other interests in the savings bank.

(c) The conversion would not be made to circumvent a pending supervisory action that is initiated by the commissioner or other regulatory agency because of a concern over the safety and soundness of the savings bank.

Upon approval of the contents of the conversion plan and information statement by the commissioner, the savings bank shall call a special meeting of the corporators to vote on the conversion plan. At least fourteen days before the meeting, the savings bank shall mail to each corporator a notice of the meeting, the conversion plan and information statement.

Certified copies of records of all proceedings held by the board of trustees and corporators of the savings bank shall be filed with the commissioner. In addition the savings bank shall furnish a certified copy of consent or approval of the federal regulatory authority. Upon acceptance of such charter the savings bank’s charter from the Commonwealth shall cease to exist.

Any person who willfully violates the disclosure provisions of this section knowing the disclosure made to be false or misleading in any material respect shall upon conviction be fined not more than five thousand dollars or imprisoned not more than three years or both.

SECTION 2. Section 37 of chapter 168, as so appearing, is hereby repealed.

SECTION 3. Section 28 of chapter 170 of the General Laws, as so appearing, is hereby amended by striking out the first three paragraphs and inserting in place thereof the following paragraphs:—

Upon the affirmative vote of two-thirds of the shareholders who vote on the proposal, a co-operative bank may convert, subject to this section, into a co-operative bank or savings bank or savings and loan chartered under the laws of the United States.

The board of directors, by an affirmative vote of two-thirds of the entire board, shall approve any plan of conversion and submit the plan to the commissioner for his review. Included with the plan shall be an information statement to be sent to shareholders which shall fully and fairly disclose all significant terms and steps to be taken for the conversion and shall include but not be limited to:

(a) a statement as to why the board is considering the conversion.

(b) a statement of the major positive and negative business effects of the proposed conversion.

The commissioner shall review the contents of the plan before the board of directors presents the conversion plan to the shareholders for a vote. The commissioner shall approve the contents of the conversion plan and information statement only if the commissioner is satisfied of all of the following:

(a) The plan discloses to the shareholders information concerning the advantages and disadvantages of the proposed conversion.

(b) The information statement discloses the impact on the share-holder’s financial and other interests in the co-operative bank.

Upon approval of the contents of the conversion plan and information statement by the commissioner, the co-operative bank shall call a special meeting of the shareholders to vote on the conversion plan. At least fourteen days before the meeting, the co-operative bank shall mail to each shareholder a notice of the meeting, the conversion plan and information statement.

Certified copies of records of all proceedings held by the board of directors and shareholders of the co-operative bank shall be filed with the commissioner. In addition the co-operative bank shall furnish a certified copy of consent or approval of the federal regulatory authority. Upon acceptance of such charter the co-operative bank’s charter from the Commonwealth shall cease to exist.

SECTION 4. Section 36 of chapter 172 of the General Laws, as so appearing, is hereby amended by striking out subsection B and inserting in place thereof the following subsection:—

B. A trust company by vote of the holders of at least two-thirds of each class of capital stock at a meeting duly called for the purpose, preceded by a notice in writing sent to each stockholder of record and to the commissioner by registered mail at least sixty days before said meeting, may consolidate or merge into a national banking association in accordance with the laws of the United States and without the approval of any authority of the commonwealth.

Upon the affirmative vote of two-thirds of the holders of each class of capital stock who vote on the proposal, a trust company may convert, subject to this section, into a trust company or commercial bank chartered under the laws of the United States.

The board of directors, by an affirmative vote of two-thirds of the entire board, shall approve any plan of conversion and submit the plan to the commissioner for his review. Included with the plan shall be an information statement to be sent to stockholders which shall fully and fairly disclose all significant terms and steps to be taken for the conversion and shall include but not be limited to:

(a) a statement as to why the board is considering the conversion.

(b) a statement of the major positive and negative business effects of the proposed conversion.

The commissioner shall review the contents of the plan before the board of directors presents the conversion plan to the stockholders for a vote. The commissioner shall approve the contents of the conversion plan and information statement only if the commissioner is satisfied of all of the following:

The plan discloses to the members information concerning the advantages and disadvantages of the proposed conversion.

The information statement discloses the impact on the stockholder’s financial and other interests in the trust company.

The conversion would not be made to circumvent a pending supervisory action that is initiated by the commissioner or other regulatory agency because of a concern over the safety and soundness of the trust company.

Upon approval of the contents of the conversion plan and information statement by the commissioner, the trust company shall call a special meeting of the stockholders to vote on the conversion plan. At least fourteen days before the meeting, the trust company shall mail to each stockholder a notice of the meeting, the conversion plan and information statement.

Certified copies of records of all proceedings held by the board of directors and stockholders of the trust company shall be filed with the commissioner. In addition the trust company shall furnish a certified copy of consent or approval of the federal regulatory authority. Upon acceptance of such charter the trust company’s charter from the Commonwealth shall cease to exist.

The commissioner may determine that documents to be sent to stockholders which have been submitted to and reviewed by a federal agency meet the requirements of this subsection.