SENATE DOCKET, NO. 1605 FILED ON: 1/21/2011
SENATE . . . . . . . . . . . . . . No. 431
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The Commonwealth of Massachusetts
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PRESENTED BY:
John F. Keenan
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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to lending.
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PETITION OF:
Name: | District/Address: |
John F. Keenan |
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Michael R. Knapik |
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SENATE DOCKET, NO. 1605 FILED ON: 1/21/2011
SENATE . . . . . . . . . . . . . . No. 431
By Mr. Keenan, petition (accompanied by bill, Senate, No. 431) of John F. Keenan and Michael R. Knapik for legislation relative to lending [Joint Committee on Financial Services]. |
The Commonwealth of Massachusetts
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In the Year Two Thousand Eleven
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An Act relative to lending.
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 6(a) of Chapter 167E of the General Laws is hereby amended by inserting a new clause (6) as follows:-
(6) The total obligations of one borrower for the purposes of this section shall include credit exposures as a counterparty in derivative transactions with the bank. For purposes of this clause (6), (i) the term “derivative transaction” shall include any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets; and (ii) “credit exposure” to a counterparty in connection with derivative transactions shall be determined based on an amount that the bank reasonably determines under the terms of the derivative or otherwise would be its loss were the counterparty to default on that date, taking into account any netting and collateral arrangements, and any guarantees or other credit enhancements; provided that the bank may elect to determine credit exposure on the basis of such other method of determining credit exposure as may be permitted by the bank’s primary Federal regulatory authority.