Bill S.552

SENATE DOCKET, NO. 1708 FILED ON: 1/16/2015

SENATE . . . . . . . . . . . . . . No. 552

By Mr. Rodrigues, a petition (accompanied by bill, Senate, No. 552) of Michael J. Rodrigues and Bruce E. Tarr for legislation to modernize the credit union laws. Financial Services.

The Commonwealth of Massachusetts

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In the One Hundred and Eighty-Ninth General Court
(2015-2016)

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An Act modernizing the credit union 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. Section 34 of chapter 29 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after the words “federal savings banks”, in line 3, the following words:- federal credit unions,.

SECTION 2. Said section 34 of said chapter 29, as so appearing, is further hereby amended by inserting after the words “and cooperative banks”, in line 5, the following words: - , cooperative banks and credit unions.

SECTION 3. Section 54 of chapter 44 of the General Laws, as so appearing, is hereby amended by inserting after the word “banks,”, in line 9, the following words:- , or in paid up shares or deposits of credit unions, or in paid up shares or deposits of federal credit unions doing business in the commonwealth,.

SECTION 4. Section 55 of said chapter 44, as so appearing, is hereby amended by inserting after the word “banks,”, in line 26, the following words: - credit unions or federal credit unions,.

SECTION 5. Section 55A of said chapter 44, as so appearing, is hereby amended by inserting after the word “banks” in line 5 and the following words: - credit unions or federal credit unions,.

SECTION 6. Chapter 168 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after section 34G the following section:-

Section 34H. A savings bank as defined in section one of chapter one hundred and sixty-seven may convert into a credit union pursuant to the provisions of section 80C of chapter 171.

SECTION 7. Chapter 170 of the General Laws, as so appearing, is hereby amended by inserting after section 26H the following section:-

Section 26I. A cooperative bank as defined in section one of chapter one hundred and sixty-seven may convert into a credit union pursuant to the provisions of section 80C of chapter 171.

SECTION 8. Section 1 of chapter 171 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking out the definition of “Central Credit Union Fund, Inc.”

SECTION 9. Section 1 of said chapter 171, as so appearing, is hereby amended by striking out, in line 11, the word “fifty”, and inserting in place thereof the following figure:- 50.

SECTION 10. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 17 and 18, the words “eighty two to eighty four”, and inserting in place thereof the following figures:- 82 to 84.

SECTION 11. Said section 1 of said chapter 171, as so appearing, is hereby further amended by inserting, after the definition of “Interest”, the following definition:- “Low-income credit union”, a credit union as defined in 12 C.F.R. 701.34.

SECTION 12. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 32, the words “two hundred and ninety four”, and inserting in place thereof the following figure:- 294.

SECTION 13. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 33, the words “nineteen hundred and sixty one”, and inserting in place thereof the following figure:- 1961.

SECTION 14. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 35, the word “eighteen”, and inserting in place thereof the following figure:- 18.

SECTION 15. Said section 1 of said chapter 171, as so appearing, is hereby further amended by inserting after the word “partnership”, in line 41, the following words:- , limited partnership, limited liability partnership, limited liability company,.

SECTION 16. Section 2 of said chapter 171, as so appearing, is hereby amended by inserting after the word “persons,”, in line 1, the following words:- the majority of whom.

SECTION 17. Said section 2 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 1, the word “resident”, and inserting in place thereof the following word: - reside.

SECTION 18. Said section 2 of said chapter 171, as so appearing, is hereby further amended by inserting after the word “provident”, in line 5, the following word:- , business.

SECTION 19. Clause (e) of section 2 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 23 and 24, the words “, his residence and the post office address.”

SECTION 20. Section 3 of said chapter 171, as so appearing, is hereby amended by adding the following paragraph:-

Notwithstanding any other provision of this chapter, a credit union may be organized or designated low-income subject to the approval of the commissioner under such procedures, terms and conditions as said commissioner may impose.

SECTION 21. Section 4 of said chapter 171, as so appearing, is hereby amended by inserting after the word “incorporator”, in line 6, the following words:- or sent to each incorporator electronically.

SECTION 22. The third paragraph of section 6 of said chapter 171, as so appearing, is hereby amended by inserting, after the word “incorporation”, in line 15, the following words:- unless such time is extended at the discretion of the commissioner.

SECTION 23. Section 5 of said chapter 171, as so appearing, is hereby amended by striking lines 9 through 40 and inserting in place thereof the following words: - The articles so signed shall be submitted to the commissioner together with the records of the proposed corporation, who shall examine the same and who may require such amendment thereof or such additional information as the commissioner may consider necessary. If the commissioner finds that the articles conform to the preceding sections relative to the organization and that section 3 has been complied with, he shall so certify and endorse his approval thereon. The commissioner shall file the articles in his office and shall issue a certificate of incorporation in the following form:

COMMONWEALTH OF MASSACHUSETTS

Be it known that whereas (the names of the subscribers to the agreement of association) have associated themselves with the intention of forming a corporation under the name of (the name of the corporation), for the purpose (the purpose declared in the agreement of association), and have complied with the statues of the commonwealth in such case made and provided, as appears from the articles of organization of said corporation, duly approved by the commissioner and recorded in this office: Now, therefore, I (the name of the commissioner), Commissioner of Banks of the commonwealth of Massachusetts do hereby certify that said (the names of the subscribers to the agreement of association), their associates and successors, are legally organized and established as, and are hereby made, an existing corporation under the name of (name of the corporation), with the powers, rights and privileges, and subject to the limitations, duties and restrictions, which by the law appertain thereto.

Witness my official signature hereunto subscribed and the great seal of the commonwealth of Massachusetts hereunto affixed, this ___ day of ____ in the year ___ (the date of the filing of the articles of organization).

SECTION 24. Section 5 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 41 and 45, the words “state secretary” and inserting in place thereof the following word:- commissioner.

SECTION 25. Section 6A of said chapter 171, as so appearing, is hereby amended by striking out, in line 21, the words “banks and banking” and inserting in place thereof the following words: - financial services.

SECTION 26. The second paragraph of section 6A of said chapter 171, as so appearing, is hereby amended by striking out the last sentence.

SECTION 27. Clause (h) of section 9 of said chapter 171, as so appearing, is hereby amended by inserting, after the words “credit committee”, in line 14, the following words:- , if applicable, as required by the bylaws.

SECTION 28. Clause (i) of section 9 of said chapter 171, as so appearing, is hereby amended by inserting, after the words “credit committee”, in line 16, the following words :- , if applicable, as required by the bylaws.

SECTION 29. Section 10 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 7 and 8, the words “, or change in locations, or change in name”.

SECTION 30. Section 11 of said chapter 171, as so appearing, is hereby amended by striking out the second and third paragraphs and inserting in place thereof the following 2 paragraphs:-

A member shall not have more than 1 vote. An organization member or persons who are parties to a joint account may cast 1 vote on the share or deposit account at any of its meetings by a duly delegated agent or a party to the joint account. A minor shall not have the right to vote. A member may vote in person, by mail, or by electronic means. Each credit union shall set forth in its by-laws the method of voting to be used. The voting methods shall be subject to conditions and limitations as the commissioner may establish.

The members at each annual meeting shall elect directors, vote on any proposed amendment to the by-laws and act on such matters as required under law.

SECTION 31. The first paragraph of section 12 of said chapter 171, as so appearing, is hereby amended by inserting, after the words “nine directors.” in line 2, the following words: - A credit union shall have the authority in its bylaws to limit the number of employees serving as directors.

SECTION 32. Section 13 of said chapter 171, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following 2 paragraphs:-

The board of directors shall have the general direction of the affairs of the corporation and shall meet as often as may be necessary, but not less than once each month. A quorum shall consist of not less than a majority of the directors. If less than a quorum is present, a majority of those present may adjourn the meeting until the next regular meeting or another time prior thereto. It shall act upon all applications for membership and determine the rate of interest to be paid on deposits. These duties may be delegated by the directors. The board may also declare dividends as provided in section 29 and shall fill vacancies in the board of directors and committees until the next annual election. These duties may not be delegated. The establishment of deposit accounts or the discontinuance thereof may be authorized by the board of directors of the credit union. It shall make recommendations to the members of the credit union relative to the need of amendments to the by-laws, and other matters upon which, in its opinion, the members should act at any regular or special meeting. The board of directors may borrow money for and on behalf of the credit union as authorized by section seventy-three. It may, by a two-thirds vote, remove from office for cause any officer or any member of any committee. It may also elect an honorary president, who shall be a member of said credit union. Said honorary president shall not be compensated in any way by the credit union. The board may appoint associate directors who shall not be compensated or vote.

Unless the articles of organization or bylaws provide that action required or permitted by this chapter or other provisions of the General Laws to be taken by the directors may be taken only at a meeting, the action may be taken without a meeting if the action is taken by the unanimous consent of the members of the board of directors. The action shall be evidenced by 1 or more consents describing the action taken, in writing, signed by each director, or delivered to the credit union by electronic transmission, to the address specified by the credit union for the purpose or, if no address has been specified, to the principal office of the credit union, addressed to the secretary or other officer or agent having custody of the records of proceedings of directors, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this section is effective when the last director signs or delivers the consent, unless the consent specifies a different effective date. A consent signed or delivered under this section has the effect of a meeting vote and may be described as such in any document. The provisions of this section shall also apply to committees of the board and the members thereof.

SECTION 33. Section 14 of said chapter 171, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-

The board of directors may expel from a credit union any member who has not carried out his engagements with it, who has been convicted of a criminal offense, or who neglects or refuses to comply with the provisions of this chapter or of the by-laws of the credit union, or who habitually neglects to pay his debts, or who has deceived the corporation or any committee thereof with regard to the use of borrowed money; provided, however, that no member shall be so expelled until he has been informed in writing of the charges against him, after reasonable notice and an opportunity to be heard thereon. Notwithstanding these provisions, a director who becomes insolvent or bankrupt shall be withdrawn from the board automatically, with no requirement for notice and an opportunity to be heard. The board of directors may suspend from a credit union any member who has been convicted of a criminal offense.

SECTION 34. Section 15 of said chapter 171, as so appearing, is hereby amended by striking out, in line 13, the words “from their own number.”

SECTION 35. Said section 15 of said chapter 171, as so appearing, is hereby further amended by inserting after the words “credit committee”, in line 17, the following words:- , if applicable, as required by the bylaws.

SECTION 36. Said section 15 of said chapter 171, as so appearing, is hereby further amended by striking out the last paragraph and inserting in place thereof the following paragraph:-

The board of directors may appoint an executive committee or a membership officer from among the board or other employees, other than the treasurer, an assistant treasurer or a loan officer and authorize such committee or officer to approve applications for membership under such conditions as the board may prescribe.

SECTION 37. Section 16 of said chapter 171, as so appearing, is hereby amended by inserting, after the word “month,” in line 3, the following word:- and,.

SECTION 38. Section 16 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 3 and 4, the words “and shall examine carefully the cash and accounts of the credit union monthly”.

SECTION 39. The last paragraph of section 16 said chapter 171, as so appearing, is hereby amended by striking out the last sentence.

SECTION 40. Section 17 of said chapter 171, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-

The credit committee, if applicable, shall hold meetings at least once in each month, act on all applications for loans and approve, in writing, all personal loans granted and the security, if any, pledged therefor, except as hereinafter provided. The credit committee shall submit to the board of directors all applications for loans to be secured by mortgages of real estate, with their recommendations thereon. The credit committee may delegate its duties to employees.

SECTION 41. The last paragraph of section 17 of said chapter 171, as so appearing, is hereby amended by striking out the third sentence.

SECTION 42. Section 18 of said chapter 171, as so appearing, is hereby amended by adding the following 2 sentences:- The investment committee shall hold meetings at least once in each month. The investment committee may delegate its duties to employees.

SECTION 43. Section 19 of said chapter 171, as so appearing, is hereby amended by striking out, in line 10, the following words:- state or.

SECTION 44. Said section 19 of said chapter 171, as so appearing, is hereby further amended by inserting, after the word “affiliate”, in line 12, the following words:- a mortgage company owned by a bank,.

SECTION 45. Section 20 of said chapter 171, as so appearing, is hereby amended by striking out the third sentence.

SECTION 46. Said section 20 of said chapter 171, as so appearing, is hereby further amended by inserting, after the word “board”, in line 21, the following words:- or unless such loans are made in compliance with National Credit Union Administration regulations governing such loans.

SECTION 47. Section 21 of said chapter 171, as so appearing, is hereby amended by striking out, in line 8, the words “such bonds” and inserting in place thereof the following words:- bonds upon which changes are made.

SECTION 48. Section 26 of said chapter 171, as so appearing, is hereby amended by striking out the first and second paragraphs and inserting in place thereof the following 2 paragraphs:-

Each credit union shall, annually, within 30 days after the last business day of December, make a report to the commissioner in such form as the commissioner may prescribe showing accurately its condition at the close of business on that day, and containing such other information as the commissioner may require. A statement of condition of a credit union shall be available for examination for reasonable purposes by members at the principal office during business hours.

Each such credit union shall prepare an annual report, in accordance with generally accepted accounting principles, which presents fairly its condition as of the last business day of its fiscal year. A copy of a statement of condition shall be made available to a member upon request.

SECTION 49. Said chapter 171 is hereby amended by striking out section 29 and inserting in place thereof the following section:-

Section 29. The capital of a credit union shall be unlimited in amount and shall consistent of shares and deposits. Share shall be a par value of not less than 1 dollar but not more than 25 dollars each and shall be subscribed and paid for in such manner as the by-laws of the credit union shall prescribe.

Dividends may be paid at various rates based on the type and amount of an account or on the terms and conditions applicable to said accounts.

The board of directors of a credit union may receive payments on uninsured non-share accounts subject to such terms, rates, and conditions as may be established by the board of directors, within limitations prescribed by the commissioner. With respect to any insured credit union other than a low-income credit union, uninsured non-share accounts shall (i) not alter the cooperative nature of the credit union; (ii) be subordinate to all other claims against the credit union, including the claims of creditors, shareholders, and the National Credit Union Share Insurance Fund; iii) be available to be applied to cover operating losses of the credit union in excess of its retained earnings and, to the extent so applied, will not be replenished; (iv) if they have a stated maturity, have an initial maturity of at least 5 years; (v) if they have a stated maturity, the net worth value of such accounts may be discounted at the discretion of the commissioner when the remaining maturity is less than 5 years; (vi) are subject to disclosure and consumer protection requirements as determined by the board; (vii) are offered by a credit union that is determined by the commissioner to be sufficiently capitalized and well-managed; (viii) are subject to such rules and regulations as the commissioner may establish; and (ix) are authorized by the National Credit Union Administration.

A share or deposit authorized by section 30 except club deposits, if the directors so determine, and if the share and deposit liabilities are insured in full under federal or state law, or both, may be received as a special notice account subject to this section.

1.Special Notice Account Agreements — Any such shares or deposits shall be received subject to a written agreement between the credit union and the shareholder or depositor or joint shareholders or joint depositors which agreement shall contain the following provisions:—

(a)Except as hereinafter provided relative to dividends or interest on such shares and deposits, neither the whole nor any part of such shares or deposits may be withdrawn other than pursuant to the terms of a withdrawal notice of ninety days or more signed by such shareholder or depositor or any joint shareholder or depositor and received by such credit union. Such notice shall state that such shareholder or depositor or such joint shareholders or depositors propose to withdraw such shares and deposits in whole or in specified part during a withdrawal period commencing upon a day specified, which day shall be not less than ninety days following the receipt by the credit union of such withdrawal notice and terminating upon the expiration of the ninth day following or, if such ninth day shall be a Saturday, Sunday or legal holiday, upon the expiration of the business day next succeeding such ninth day.

(b)Any ordinary, extra or additional dividend or interest on such shares or deposits may be withdrawn pursuant to a permanent dividend or interest order signed by such shareholder or depositor or any joint shareholder or depositor and received by such credit union prior to the day upon which such dividend or interest becomes payable or pursuant to a demand made by such shareholder or depositor or any joint shareholders or depositors within one year after the day upon which such dividend or interest became payable. If not so withdrawn, no such dividend or interest shall be withdrawn except as hereinbefore provided in subparagraph (a).

2.Withdrawals — No such credit union shall permit the whole or any part of such shares or deposits or any ordinary, extra or additional interest or dividend declared thereon to be withdrawn, in whole or in part, except in accordance with the terms of such agreement.

3.Passbooks — Each passbook representing shares or deposits received under this section shall contain the title “Special Notice Account.”

Notwithstanding any other provisions of law, any credit union or federal credit union may accept public funds pursuant to section 34 of chapter 29 and sections 54, 55 and 55A of chapter 44 as provided for therein; provided, however, that the total of such public funds received shall not exceed, at any time, 25 percent of the assets of the credit union or federal credit union.

SECTION 50. Section 30 of said chapter 171, as so appearing, is hereby amended by inserting after the words “National Credit Union Administration”, the following words:- and to members of low-income credit unions.

SECTION 51. Said chapter 171 is hereby amended by striking out section 32A, as so appearing, and inserting in place thereof the following section:-

Section 32A. Notwithstanding any other law, a credit union has authority to accept a prepaid funeral trust account, as defined in 239 C.M.R. 4.01.

SECTION 52. Section 33 of said chapter 171, as so appearing, is hereby repealed.

SECTION 53. Section 34 of said chapter 171, as so appearing, is hereby repealed.

SECTION 54. Section 35 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 4 through 8, the words “; provided, however, that the deposit accounts of any one such person, partnership or corporation shall not, except by the accumulation of interest, be permitted to exceed at any one time, seventy-five thousand dollars or one and one half percent of the deposits or shares of the credit union, whichever is greater.”

SECTION 55. The last paragraph of section 39 of said chapter 171, as so appearing, is hereby amended by adding the following sentence:- The surviving owner or owners of a joint account may continue credit union membership; provided, however, that the surviving owner or owners shall be eligible for membership and shall meet all requirements as set forth in the by-laws.

SECTION 56. Section 41 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 2 and 3, the words “in the discretion of the directors”, and inserting in place thereof the following words:- subject to the policy of the credit union.

SECTION 57. Section 42 of said chapter 171, as so appearing, is hereby amended by striking out, in line 6, the words “the treasurer or other”.

SECTION 58. Section 44 of said chapter 171, as so appearing, is hereby repealed.

SECTION 59. Section 45 of said chapter 171, as so appearing, is hereby repealed.

SECTION 60. Section 48 of said chapter 171, as so appearing, is hereby amended by adding the following paragraph:-

Notwithstanding any other law, a credit union has the authority to impress and enforce a lien, as defined in 12 C.F.R. 701.39, upon the shares and dividends of any member, to the extent of any loan made to him and any dues or charges payable by him.

SECTION 61. Section 49 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 5 and 6, the words “certified mail, return receipt requested” and inserting in place thereof the following words:- first class mail, or electronic mail.

SECTION 62. Section 50 of said chapter 171, as so appearing, is hereby amended by striking out, in line 4, the words “the treasurer” and inserting in place thereof the following words:- a duly authorized officer of the corporation.

SECTION 63. Section 53 of said chapter 171, as so appearing, is hereby amended by striking out the definition of “Account”, and inserting in place thereof the following definition:- “Account”, a share, share certificate, or share draft account of a member of a credit union of a type approved by the board of the credit union which evidences money or its equivalent received or held by a credit union in the usual course of business and for which it has given or is obligated to give credit to the account of the member, and, in the case of a credit union serving predominantly low-income members (as defined by said board), such terms (when referring to the account of a nonmember served by such credit union) mean a share, share certificate, or share draft account of such nonmember which is of a type approved by the board and evidences money or its equivalent received or held by such credit union in the usual course of business and for which it has given or is obligated to give credit to the account of such nonmember, and such terms mean share, share certificate, or share draft account of nonmember credit unions and nonmember units of federal, State, or local governments and political subdivisions thereof, and such terms mean custodial accounts established for loans sold in whole or in part; provided, that for purposes of insured State credit unions, reference in this paragraph to “share”, “share certificate”, or “share draft”, accounts includes, as determined by the Board, the equivalent of such accounts under State law.

SECTION 64. Section 54 of said chapter 171, as so appearing, is hereby repealed.

SECTION 65. Section 55 of said chapter 171, as so appearing, is hereby repealed.

SECTION 66. Section 56 of said chapter 171, as so appearing, is hereby repealed.

SECTION 67. Section 57 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 5 and 6, the words “and shall state the purpose for which the loan is desired and the security, if any, offered” and inserting in place thereof the following words:- or by electronic means.

SECTION 68. Said section 57 of said chapter 171, as so appearing, is hereby further amended by striking out the third and fourth paragraphs.

SECTION 69. Section 58 of said chapter 171, as so appearing, is hereby amended by striking out the last paragraph.

SECTION 70. Section 59 of said chapter 171, as so appearing, is hereby repealed.

SECTION 71. Section 59A of said chapter 171, as so appearing, is hereby repealed.

SECTION 72. Section 60 of said chapter 171, as so appearing, is hereby repealed.

SECTION 73. Section 61 of said chapter 171, as so appearing, is hereby repealed.

SECTION 74. Section 62 of said chapter 171, as so appearing, is hereby repealed.

SECTION 75. Section 64 of said chapter 171, as so appearing, is hereby repealed.

SECTION 76. Subsection (b) of section 65A of said chapter 171, as so appearing, is hereby amended by adding the following clause:-

(7) mortgage loans as participation loans with a bank, credit union service organization, federally-chartered or federally-insured credit union or financial institution, insurance company, or any state or federal government agency and its subdivisions.

SECTION 77. Section 65B of said chapter 171, as so appearing, is hereby amended by striking out subsection (b).

SECTION 78. Subsection (5) of section 65D of said chapter 171, as so appearing, is hereby amended by striking out, in line 17, the words “not less than 30 days before the adjustment” and inserting in place thereof the following words:- between 210 and 240 days prior to the first payment due after the rate first adjusts. Subsequent notification and explanation shall occur between 60 and 120 days before payment at a new level is due when a rate adjustment causes the payment to change.

SECTION 79. Said section 65E of said chapter 171, as so appearing, is hereby further amended by striking out clause (3) and inserting in place thereof the following clause:-

(3) to buy, sell or make loans and mortgage loans as participation loans with a bank, credit union service organization, federally-chartered or federally-insured credit union or financial institution, insurance company, or any state or federal government agency and its subdivisions, and to service any loans sold by it.

SECTION 80. Section 66 of said chapter 171, as so appearing, is hereby amended by striking out clauses (2) and (3).

SECTION 81. Section 67 of said chapter 171, as so appearing, is hereby amended by striking out clause (a).

SECTION 82. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 13, the figure “1961.” and inserting in place thereof the following figure:- 1961;.

SECTION 83. The first paragraph of said section 67 of said chapter 171, as so appearing, is hereby amended by striking out clause (o) and inserting in place thereof the following clause:-

(o) in any obligations, bank stocks, bank holding company stocks, insurance stocks or preferred stocks of public utility companies which appear on the list of legal investments prepared pursuant to said section 15A of said chapter 167; provided, however, that:

(i) not more than 10 per cent of the assets of a credit union shall be invested in bank stocks or bank holding company stocks or insurance stocks or preferred stocks of public utility companies or in all 4 of such types of stocks appearing on the list and not more than $15,000 or 2 per cent of the assets of a credit union, whichever is greater, shall be invested in the stock of any 1 such bank, bank holding company, insurance company or preferred stock of public utility companies;

(ii) not more than 20 per cent of the assets of a credit union shall be invested in railroad obligations appearing on the list and not more than 1.5 per cent of the shares and deposits of any such credit union shall be invested in the obligations of any 1 operating railroad corporation;

(iii) not more than 20 per cent of the assets of a credit union shall be invested in the obligations of telephone companies appearing on the list and not more than 4 per cent of the shares and deposits of such credit union shall be invested in the obligations of any 1 such company;

(iv) not more than 25 per cent of the assets of a credit union shall be invested in obligations of public utility companies appearing on the list and not more than 4 per cent of the deposits of such credit union shall be invested in the obligations of any 1 such company; and

(v) not more than 10 per cent of the assets of a credit union shall be invested in interest bearing obligations authorized for investment under section 15B of chapter 167 and appearing on the list of legal investments prepared pursuant to said section 15A of said chapter 167 and not more than 1/2 of 1 per cent of the shares and deposits of such credit union shall be so invested in the obligations of any one obligor, but the foregoing limitations shall not apply to obligations of telephone companies, of companies engaged primarily in the distribution and sale of electricity or gas, or both, or of railroad companies other than terminal companies;

SECTION 84. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 82, the word “funds.” and inserting in place thereof the following word:- funds;.

SECTION 85. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 103 and 104, the words “clause (i) of this paragraph” and inserting in place thereof the following word:- subclause (i).

SECTION 86. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 113, the word “commonwealth.” and inserting in place thereof the following word:- commonwealth;

SECTION 87. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 133, the word “and”.

SECTION 88. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 134, the word “Boston.” and inserting in place thereof the following words:- Boston; and.

SECTION 89. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 135, the word “paragraph” and inserting in place thereof the following word:- clause.

SECTION 90. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 139, the word “paragraphs” and inserting in place thereof the following word:- clauses.

SECTION 91. Said section 67 of said chapter 171, as so appearing, is hereby further amended by adding the following 4 clauses:-

(w) in any capital stock of a corporation organized for the purpose of acquiring and managing interests in real property and acquiring, constructing, rehabilitating, leasing, financing and disposing of housing facilities, or in any other interest in real or personal property or activities incidental thereto, debt security, equity security, loan or community benefits; provided, however, that (a) not more than 7 percent of the deposits of a credit union shall be invested pursuant to the provisions of this paragraph; and provided, further, that any amount in excess of 3 percent of said 7 percent shall be invested by such credit union in the following manner: (i) in the capital stock of a corporation organized for the purpose of acquiring, constructing, rehabilitating, leasing, financing and disposing of housing facilities; (ii) for the purpose of micro-lending in the area of small business, including the fishing industry, and farm loans; and (iii) for the purpose of providing technical assistance to nonprofit housing corporations, small businesses and farms for the purpose of establishing credit worthiness; (b) no investment shall be made by such corporation in the equity securities of any one issuer pursuant to this paragraph if the aggregate amount invested by it in the equity securities of such issuer pursuant to this paragraph together with the amount invested in such securities pursuant to any other provision of law exceeds, or by the making of such investment will exceed, 2 percent of the deposits of such corporation, and no investment shall be made by such credit union in a loan to, or the debt securities of, any one issuer pursuant to this paragraph, if the aggregate amount invested by it pursuant to this paragraph together with the amount invested in a loan to, or in the debt securities, of such issuer pursuant to any other provision of law exceeds 2 percent of the deposits of such credit union; (c) any loan made or debt security purchased pursuant to this paragraph shall be secured over the term of the loan or the debt security; (d) this paragraph shall not be deemed to alter any provision of this chapter or other provision of law limiting the aggregate amount that may be invested in any class of loan or investment, except for (ii) and (iii), above, which shall be in addition to any such provision of this chapter or other provision of law; and (e) investments authorized solely by this paragraph shall not be deemed investments in which credit unions may legally invest for the purposes of any other provision of law which restricts investments to those in which credit unions may legally invest.

(x) to engage in an activity and to acquire and retain the shares of any company engaged in any activity that the commissioner determines to be financial in nature or incidental to the financial activity that is complementary to a financial activity and does not pose a substantial risk to the safety and soundness of the credit union, subject to the approval of the commissioner and under limitations or conditions he may impose. In determining whether an activity is financial in nature or incidental or complementary thereto, the commissioner shall consider, but shall not be limited to, those activities considered to be financial in nature or incidental to the financial activity or an activity that is complementary to a financial activity under section 103, section 121 and section 122 of Public Law 106-102, entitled the “Gramm-Leach-Bliley Act of 1999”. Notwithstanding any general or special law to the contrary, this chapter does not authorize a credit union or a subsidiary or affiliate of a credit union to sell title insurance.

(y) to participate in the redevelopment access to capital program created under section 60 of chapter 23A and to make the loans and create the reserve and take other actions necessary or appropriate for participating in the program.

(z) to exercise any power and engage in any activity that is permissible for an out-of-state credit union, by providing 30 days written notice in advance to the commissioner; provided, however, that the activity is not otherwise prohibited under the laws of the commonwealth; provided, further, that the activity shall be subject to the same limitations and restrictions that are applicable to the federal or out-of-state credit union. In the event that federal or out-of-state credit unions lose the authority to exercise any power or engage in any activity based upon which comparable authority was granted to state chartered credit unions pursuant to this paragraph, unless such authority is authorized by another law of the commonwealth, or a rule, regulation or policy adopted pursuant to such other law of the commonwealth, or by a judicial decision, the authority shall be revoked for state chartered credit unions pursuant to this paragraph. At the time the notice is filed or at any time the notice is pending, a credit union may request that the commissioner waive and the commissioner may waive the remaining notice period.

SECTION 92. Section 67A of said chapter 171, as so appearing, is hereby amended by striking out, in line 5, the figure “(1)”.

SECTION 93. Said section 67A of said chapter 171, as so appearing, is hereby amended by striking out, in line 9, the figure “(2)”.

SECTION 94. Said section 67A of said chapter 171, as so appearing, is hereby amended by striking out, in line 13, the figure “(3)”.

SECTION 95. Section 69 of said chapter 171, as so appearing, is hereby amended by striking out the last paragraph.

SECTION 96. Section 70 of said chapter 171, as so appearing, is hereby repealed.

SECTION 97. Said chapter 171 is hereby further amended by striking out section 71, as so appearing, and inserting in place thereof the following section:-

Section 71. At least 5 per cent of the total assets of a credit union shall be carried as cash on hand or in the following investments which shall be absolute property and shall be under the control of the credit union or be held by book entry procedure when required.

(a) shares in a federally-insured corporate credit union;

(b) deposits in savings banks incorporated in the commonwealth;

(d) shares of savings and loan associations incorporated in the commonwealth;

(e) balances due from banks and trust companies or banking companies which are members of the Federal Deposit Insurance Corporation;

(f) shares of federal savings and loan associations having a usual place of business within the commonwealth;

(g) bonds or notes of the United States or of any state or subdivision thereof with a maturity of up to 5 years;

(h) bonds or notes of other federal agencies which are on the list of legal investments prepared pursuant to section 15A of chapter 167 with a maturity of up to 3 years;

(i) repurchase agreements secured by United States government obligations up to 1 year maturity; provided, however, that repurchase agreements greater than 1 year maturity shall contain provisions authorizing early withdrawal of such obligations;

(j) in a common trust unit plan organized for the purchase of bonds or notes of the United States or of any subdivision thereof which are on the list of legal investments prepared pursuant to said section 15A of said chapter 167 and which has as its custodian a banking institution authorized to accept deposits from a credit union or from a savings bank;

(k) securities of government sponsored enterprises;

(l) federal funds;

(m) in any bonds or notes which are on the list of legal investments prepared pursuant to said section 15A of said chapter 167 with a maturity of up to 3 years; provided, however, that such bonds or notes are rated as A, AA, or AAA; and

(n) certificates of deposit of up to 1 year maturity which otherwise meet the criteria in clauses (a) to (h), inclusive, or clause (q) of the first paragraph of section 67.

SECTION 98. Section 72 of said chapter 171, as so appearing, is hereby repealed.

SECTION 99. Said chapter 171 is hereby further amended by striking out section 73, as so appearing, and inserting in place thereof the following section:-

Section 73. The board of directors may borrow money for and in behalf of the credit union.

Said board may, if the credit union has a deposit or share account therein, borrow money for and on behalf of the credit union from a savings bank, cooperative bank, federal savings and loan association, national bank or trust company, entities determined by the commissioner or any federally-insured corporate credit unions; provided, however, that money borrowed from such institution is in an amount not exceeding said deposit or share account and is for a time not extending beyond the end of a 1 year period from the date on which the loan is made.

SECTION 100. Section 74 of said chapter 171, as so appearing, is hereby amended by inserting, after the word “obtained;”, in line 8, the following word:- and.

SECTION 101. Said section 74 of said chapter 171, as so appearing, is hereby further amended by striking out clause (d).

SECTION 102. Said chapter 171 is hereby further amended by striking out section 75, as so appearing, and inserting in place thereof the following section:-

Section 75. A well capitalized or adequately capitalized credit union, as defined by 12 C.F.R. 702.102, may invest, in the aggregate, in any fixed assets in an amount not to exceed 5 percent of the credit union’s shares and retained earnings without advance regulatory approval. Included in such investments is the purchase, erection, or preparation of rental property in a reasonable amount; provided, however, that said rental property is necessary to complete said purchase, erection or preparation. The commissioner may waive these requirements.

A credit union may invest an amount to be approved by the commissioner, subject to such regulations, if any, as he may deem necessary, in a corporation or association formed for the purpose of furnishing to such credit union, or to other credit unions or banks as hereinafter provided, statistical or bookkeeping services or information of the kind generally required by a credit union. A credit union may also, in participation with any other credit union, bank or national banking association, invest its shares or deposits in such corporation or association, subject however to the same approval and regulation, if any, as above provided. The provisions of section 2 of chapter 167 shall apply to such corporations or associations. Nothing contained herein shall be construed to preclude a credit union from renting or subscribing for the services of such corporations or associations or any other corporation or association rendering such services.

A credit union may purchase by itself or with other credit unions or banks, group life insurance on the lives of debtors who request such insurance. The premium for such insurance, or the premium on an individual life insurance policy held to cover the indebtedness, may be added to the payments required of those who elect to become insured. In the event of the death of any debtor so insured, the insurance proceeds shall be applied to reduce or extinguish the unpaid indebtedness to the extent of such payment.

No director, officer or employee of such credit union shall benefit financially, directly or indirectly from the sale of such insurance.

A credit union may purchase by itself or with a group of credit unions or banks, group accident and health insurance covering debtors of such credit union or group of credit unions if the debtors request such insurance. Such insurance shall cover all or part of the indebtedness of such debtors. The premium for such insurance or the premium on an individual accident and health insurance policy held to cover the indebtedness, may be added to the payments required of any such debtor who elects to become insured. No director, officer or employee of such credit union shall benefit financially, directly or indirectly, from the sale of such insurance.

A credit union may engage directly in the business of selling, issuing or registering checks, traveler’s checks or money orders and may cash any check or money order whatsoever and may make charges for any of the foregoing.

A credit union may establish and maintain safe deposit vaults and rent boxes or storage space therein under conditions prescribed by the commissioner.

For the purposes of this section “safe deposit box” shall mean a box or safe in the vaults of any credit union; “lessee” shall mean the person in whose name a safe deposit box stands on the books of a credit union; and “rent” shall mean the amount due to a credit union for the rental or use of a safe deposit box.

A credit union which leases a safe deposit box for rent shall advise the lessee in writing that insurance coverage for the contents of such safe deposit box is not provided by such credit union, but that the lessee may, at his own expense, insure said contents with an insurance company of his own selection. The commissioner shall establish such rules and regulations as he deems necessary to carry out the provisions of this paragraph.

If the rent for a safe deposit box has not been paid for one year after being due, the credit union may mail, postage prepaid, to the lessee at his address shown on its books, a notice stating that if the rent for such safe deposit box is not paid within 60 days from the date of such notice, the credit union may cause such safe deposit box to be opened and the contents to be disposed of in accordance with the provisions of this section. Upon the expiration of 60 days from the date of such notice, if the lessee has failed to pay the rent for such safe deposit box in full to the date of such notice, all rights of the lessee in the safe deposit box and of access thereto shall cease and such credit union may, at any time thereafter in the presence of one of its officers and of a notary public not in the general employ of such credit union, cause such safe deposit box to be opened and such notary public shall remove the contents thereof, list the same and seal such contents in a package, marking thereon the name of the lessee and his address as shown on the books of the credit union. An affidavit setting forth the facts concerning the entry and listing the contents of the safe deposit box shall be signed by the officer and the notary public and shall be retained by the credit union. Such affidavit shall be prima facie evidence of the facts set forth therein in all proceedings at law and equity wherein evidence of such facts would be admissible.

The package containing the contents of any safe deposit box opened as aforesaid shall be retained on special deposit by the credit union subject to payment of rent due for such safe deposit box, all expenses incurred in connection with opening such safe deposit box and charges for the safekeeping of such package. If such package remains unclaimed for seven years and the amounts due as above provided remain unpaid, the credit union may mail, postage prepaid, to the person to whom, and at the address at which, the notice provided for above was mailed, a notice stating that if such amounts shall not be paid within 60 days from the date of such notice, the credit union will turn over the contents, less the rental charge, to the state treasurer as unclaimed and abandoned property, to be held by him subject to the provisions of chapter two hundred A. The credit union may sell, assign or deliver so much of the contents of such package, at either public or private sale, as will enable it to realize such amount as will compensate such credit union for said charges.

The affidavit required by this paragraph shall be in substantially the following form:—

COMMONWEALTH OF MASSACHUSETTS

County of

We, ___ an authorized official of ___ and ___ a notary public not in the general employ of said credit union, hereby certify that on the ___ day ___ (insert year), we were present and witnessed the forcible opening of Safe No. ___ leased in the name of ___ in the vaults of the ___ office of said credit union; that the contents of said safe were removed, examined, listed and then enclosed in a package and sealed in our presence. We further certify that the following is a true and complete list of all the contents removed from said safe.

(Allow space here for listing of contents.)

___________________________________________________________________

Signature of officer. Title.

___________________________________________________________________

Name of Credit Union

___________________________________________________________________

Signature of notary public not in the general employ of said credit union.

SECTION 103. Section 75B of said chapter 171, as so appearing, is hereby amended by striking out, in line 175, the words “state secretary” and inserting in place thereof the following word:- commissioner.

SECTION 104. Section 76 of said chapter 171, as so appearing, is hereby amended by striking out, in line 7, the words “, with the approval of the commissioner”.

SECTION 105. Section 78 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 16 and 17, the words “state secretary” and inserting in place thereof the following word:- commissioner.

SECTION 106. Said section 78 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 40, the words “in accordance with section six”.

SECTION 107. Said section 78 of said chapter 171, as so appearing, is hereby further amended by adding the following paragraph:-

A credit union may consolidate with and into a federal credit union and a federal credit union may consolidate with and into a credit union. In any such consolidation the credit union shall comply with the applicable provisions of this section. A federal credit union in such a transaction shall comply with applicable federal law.

SECTION 108. Said chapter 171 is hereby further amended by striking out section 78A, as so appearing, and inserting in place thereof the following section:-

Section 78A. Any one or more credit unions may merge or consolidate with one or more savings banks, as defined in section 1 of chapter 168, into a single savings bank or credit union pursuant to the provisions of section 34F of said chapter 168.

SECTION 109. Said chapter 171 is hereby further amended by striking out section 78B, as so appearing, and inserting in place thereof the following section:-

Section 78B. Any one or more credit unions may merge or consolidate with 1 or more cooperative banks, as defined in section 1 of chapter 170, into a single cooperative bank or credit union pursuant to the provisions of section 26F of said chapter 170.

SECTION 110. Said chapter 171 is hereby further amended by striking out section 79 as so appearing, and inserting in place thereof the following section:-

Section 79. If the commissioner has taken possession of a credit union as provided for in sections 22 to 26, inclusive, of chapter 167 or a credit union is in the possession of the Massachusetts Share Insurance Corporation and it is determined by the commissioner and the insurer that it is in the best interests of the depositors, shareholders and insurer, a merger as provided for in section 78 may be effected without regard to geographical limitations within the commonwealth.

SECTION 111. Section 80 of said chapter 171, as so appearing, is hereby amended by striking out, in line 13, the words “state secretary” and inserting in place thereof the following word:- commissioner.

SECTION 112. Said section 80 of said chapter 171, as so appearing, is hereby further amended by adding the following paragraphs:-

A credit union may consolidate with and into a foreign credit union and a foreign credit union may consolidate with and into a credit union. In any such consolidation the credit union shall comply with the applicable provisions of this section.

With the approval of the Commissioner, any credit union may acquire loans or assume an assignment of deposits, shares, or liabilities from:

(i) Any other federally insured credit union or bank, mortgage bank, consumer finance company, insurance company, loan broker, or other loan seller or liability trader; or

(ii) Any successor in interest to any institution identified in paragraph (a)(1) of this section.

Approval is not required for:

(i) Purchases of student loans or mortgage loans to facilitate the packaging of a pool of loans to be sold or pledged on the secondary market or purchases of member loans under this chapter;

(ii) Assumption of deposits, shares or liabilities as rollovers or transfers of member retirement accounts or in which a federally-insured credit union perfects a security interest in connection with an extension of credit to any member.

(iii) Purchases of assets, including loans or mortgage loans, or assumptions of deposits, shares, or liabilities by any federally-insured credit union from another federally-insured credit union, except a purchase or assumption as a part of a merger or

(iv) Purchases of loan or mortgage loan participations under this chapter.

SECTION 113. Section 80A of said chapter 171, as so appearing, is hereby amended by striking out, in line 140, the words “secretary of state” and inserting in place thereof the following word:- commissioner.

SECTION 114. Chapter 171 of the General Laws, as so appearing, is hereby amended by inserting after section 80B the following section:-

Section 80C. (a) A savings bank governed by the provisions of chapter 168 or a cooperative bank governed by the provisions of chapter 170 may convert into a credit union subject to the provisions of this section. Any such conversion shall comply with all applicable federal laws and regulations.

(b) A savings or cooperative bank that is at least adequately capitalized and has received at least a satisfactory rating in its most recent examination for compliance at the Community Reinvestment Act may submit a detailed plan of conversion approved by 2/3 vote of the entire board of directors to the commissioner. The commissioner may require changes and additions to the plan, including but not limited to, changes to any notices, disclosures, or communications, except as required by federal law or regulation. The commissioner may prescribe regulations for any savings or cooperative banks to covert to a credit union charter. Unless waived by the commissioner, the converting savings or cooperative bank shall prepare and submit to the commissioner a conversion plan which shall include, but not be limited to:

(1) A 3-year business plan which shall include performance financial statements for the credit union;

(2) An estimated budget for conversion expenses;

(3) Financial statements for the most recently completed quarter;

(4) The manner in which the converting bank will comply with membership requirements and divest itself of customers who do not meet credit union field-of-membership limitations;

(5) The manner in which the converting bank will convert its board to a voluntary non-paid structure and divest its board of stock options, if any;

(6) The manner in which the converting bank will divest its capital stock, if any;

(7) The manner in which the converting bank will divest impermissible investments;

(8) The manner in which the converting bank will comply with branching, share and deposit limitations;

(9) The manner in which the converting bank will comply with organizational member and member business loan requirements under relevant state and federal provisions;

(10) A copy of materials forwarded to corporations or shareholders relative to voting on the plan of conversion;

(11) The proposed amended and restated articles of organization and bylaws of the converting bank;

(12) If applicable, the procedures and timing for conversion from federal deposit insurance to federal share insurance;

(13) If applicable, the procedures and timing for changes in relevant state excess deposit insurers; and

(14) Any other relevant information that the commissioner may reasonably require.

(c) The converting bank shall perform a complete policy review to address appraisal restrictions, lending restrictions, investment restrictions, and corporate structure restrictions, in order to ensure compliance with the provisions of this chapter and any relevant state or federal credit union regulations.

(d) Upon approval of a plan of charter conversion by the board of directors of the converting savings or cooperative bank, the conversion plan and certified copy of the resolution of the board of directors approving the conversion plan shall be submitted to the commissioner. Included with the plan shall be an information statement to be sent to corporators or 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:

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

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

(3) the impact on the corporators or shareholders financial and other interests in the proposed credit union.

(4) a disclosure of any conversion related economic benefit a director or senior management official may receive including receipt of or an increase in compensation.

(e) 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, timing and other material aspects of the plan of reorganization and information statement to be sent to corporators and shareholders.

(f) The commissioner shall review the contents of the plan before the board presents the conversion plan 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:

(1) The plan discloses information concerning the advantages and disadvantages of the proposed conversion.

(2) The information statement discloses the impact on the corporators or shareholders financial and other interests in the credit union.

(3) 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 or cooperative bank.

(g) Upon approval of the contents of the conversion plan and information statement by the commissioner, the savings or cooperative bank shall call a special meeting of the corporators or shareholders to vote on the conversion plan. At least thirty days before the meeting, the savings or cooperative bank shall mail a notice of the meeting, the conversion plan and information statement to all corporators and shareholders.

(h) The plan of conversion shall be approved by a majority vote of the shareholders or corporators voting. A shareholder or corporator may vote on the proposal to convert in person at the special meeting held on the date set for the vote or by ballot. The vote on the conversion proposal shall be by secret ballot and conducted by an independent entity. The independent entity shall be a company with experience in conducting corporate elections. A director of officer of the savings or cooperative bank, or an immediate family member of a director or officer, shall not have an ownership interest in, or be employed by the entity.

(i) An officer or director thereof shall not directly or indirectly give or offer or provide a chance to win a lottery or anything of substantial value, as determined by the commissioner, to the corporators or shareholders of the bank for an action related to the conversion to a credit union or as an inducement to vote on the plan of conversion.

(j) The provisions on notice to corporators or shareholders and voting procedures in this section shall govern the process for converting to a credit union notwithstanding other provisions of this chapter or a by-law of the converting savings or cooperative bank to the contrary.

(k) If the commissioner disapproves the methods by which the vote was taken or the procedures applicable to the vote, the commissioner may direct that a new vote be taken. If the commissioner does not disapprove of the methods by which the vote was taken within 10 days after the notification is given, the vote shall be considered approved.

(l) Certified copies of records of all proceedings held by the board of directors and corporators and shareholders of the savings or cooperative bank shall be filed with the commissioner.

(m) The commissioner may authorize a credit union resulting from a charter conversion under this chapter to do the following:

(1) Complete any activities that the converting bank legally engaged in at the effective time of the charter conversion but that otherwise are not permissible for credit unions; and

(2) Retain for a transitional period any assets that the converting bank legally held at the effective time of the charter conversion that otherwise may not be held by credit unions.

The terms and conditions of the completion of activities under subparagraph (1) and the retention of assets under subparagraph (2) of this paragraph are subject to the discretion of the commissioner. However, the transitional period during which activities may be carried out under subparagraph (1) or assets may be retained under subparagraph (2) may not exceed ten (10) years after the effective time of the charter conversion.

n) If the conversion to a credit union is approved by the board of directors and the commissioner receives notification from the converting savings or cooperative bank that all approvals required under state and federal law and regulations, including required approvals for federal share insurance by the National Credit Union Administration have been obtained, that any waiting period prescribed by federal law has expired, that membership in the Massachusetts Credit Union Share Insurance Corporation and of the share insurance fund thereof has been obtained and that all applicable payments thereto have been made as determined by the commissioner, then a certificate to transact business shall be issued by the commissioner as applicable. After receipt of the certificate to transact business, the converting savings or cooperative bank shall promptly file such certificate and its articles of organization with the commissioner. Upon such filing, the charter of the converting savings or cooperative bank shall automatically cease, and the converting bank shall cease to be a bank and shall become a credit union. Upon such conversion, the converted credit union shall possess all the rights, privileges, and powers granted to it by its articles or organization and by the provisions of general statues applicable to the type of credit union charter to which it converted. All of the assets and business of the converting savings or cooperative bank shall transferred to and vested in it without any deed or instrument of conveyance, provided the converting bank may execute any deed or instrument of conveyance as is convenient to confirm such transfer. The converted credit union shall be subject to all of the duties, relations, obligations, and liabilities of the converting bank, whether as debtor, depository, or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform all such duties in the same manner and to the same extent as if the converted credit union had itself incurred the obligation or liability or assumed the duty or relation. All rights of the credits of the converting savings or cooperative bank shall be preserved unimpaired, and the converted credit union shall be entitled to receive, collect, accept, hold, and enjoy any and all gifts, bequests, devises, conveyances, and appointments in favor of or in the name of the converting savings or cooperative bank and whether made or created to take effect prior to or after the conversion.

(o) A person who willfully violates the disclosure provisions of this section knowing the disclosures made to be false or misleading in a material respect shall upon conviction be fined not more than $5,000 or imprisoned not more than 3 years, or both.

SECTION 115. Said chapter 171 is hereby further amended by striking out section 82 as so appearing, and inserting in place thereof the following section:-

Section 82. Credit unions may form the Credit Union Employees Retirement Association, in this section and in sections 83 and 84 called the association, for the purpose of providing retirement or deferred compensation benefit services through plans that are qualified under sections 401, 408 or 457 of the federal Internal Revenue Code to employees of credit unions established under the laws of the commonwealth and which are members of the association and to their customers. Any bank or credit union chartered by the commonwealth, any such bank or credit union which has converted to federal charter and has its main office located in the commonwealth, any bank or credit union chartered by the federal government, by a state of the United States other than the commonwealth or by the District of Columbia and which has its main office or a branch office located in the commonwealth or in Maine, Vermont, New Hampshire, Rhode Island, or Connecticut, the Massachusetts Credit Union League, Inc., and its successors, the Massachusetts Credit Union Share Insurance Corporation, and other banking or credit union institutions with their main office or any branch office located in the commonwealth, as may from time to time be provided for in the by-laws of the association, and the respective employees of each of the foregoing, shall be eligible for membership in the association; provided, however, that no bank that was eligible to be a member of the association before January 1, 2004, shall be eligible to become a member of the Cooperative Banks Employees Retirement Association or the Savings Banks Employees Retirement Association unless and until the Cooperative Banks Employees Retirement Association and the Savings Banks Employees Retirement Association permits a member to transfer from any or all of the qualified plans provided by said association, assets and liabilities, attributed to the member’s employees, to 1 or more qualified plans not provided by said association. For the purpose of this section and sections 83 and 84, a reference to “credit union” or “credit unions” shall, unless the context otherwise requires, mean and include any or all of the organizations named or referred to in this paragraph, a reference to “directors of a credit union” shall, unless the context otherwise requires, mean and include the governing body of each member organization, and reference to “customer” shall mean any person or business who has established a contractual relationship for banking business purposes with any credit union located in the commonwealth which is a member of the association.

Eligible employees may contribute a portion of their compensation and a credit union may contribute to the extent determined by its governing body; provided, however, that all such contributions shall not exceed the limits of the applicable section of the federal Internal Revenue Code.

The funds contributed by participating credit unions and their employees shall be held or used by the trustees of the association for the provision of retirement and deferred compensation benefits, including pre-retirement, post-retirement cost-of-living adjustment, death, and disability benefits incident thereto, in all cases subject to the limits of the applicable section of the federal Internal Revenue Code. Expenses necessary for the administration of the association shall be paid by participating members as provided in the by-laws of the association. The association shall annually provide to each member a report of assets and liabilities attributable to its participants in any or all qualified plans adopted by a member.

A credit union providing retirement benefits to its employees through a plan offered by a provider of plans other than the association, which shall be a qualified plan under 26 U.S.C. section 401, 408 or 457, shall file with the commissioner such reports as the commissioner may from time-to-time require.

SECTION 116. Said chapter 171 is hereby further amended by striking out section 83 as so appearing, and inserting in place thereof the following section:-

Section 83. The by-laws of the association shall be submitted to the commissioner and shall prescribe the manner in which, and the officers and agents by whom, the association may be conducted and the manner in which its funds may be invested and paid out. Such association shall be formed when its by-laws have been approved and agreed to by a majority of the directors of each of 15 or more credit unions and have been approved by the commissioner. The association shall provide to the commissioner such statements of the membership and financial transactions association as the commissioner may from time-to-time require. The commissioner may verify any such statement by an examination of the books and papers of the association.

The association shall not be subject to chapter 32 or chapter 175 or to such other provisions of law as relate to insurance companies or other retirement associations.

SECTION 117. Section 84 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 1 and 2, the words “wages or salary” and inserting in place thereof the following word:- compensation.

SECTION 118. Said section 84 of said chapter 171, as so appearing, is hereby further amended by inserting, after the word “insolvency,”, in line 5, the following words:- , insurance, retirement systems and pension.

Name:	District/Address:
Michael J. Rodrigues	First Bristol and Plymouth
Bruce E. Tarr	First Essex and Middlesex