Bill H.1052

HOUSE DOCKET, NO. 3235 FILED ON: 2/18/2021

HOUSE . . . . . . . . . . . . . . . No. 1052

By Mr. Cahill of Lynn, a petition (accompanied by bill, House, No. 1052) of Daniel Cahill relative to banking laws and related statutes. Financial Services.

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Second General Court
(2021-2022)

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An Act amending the banking laws and related statutes.

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 sentence of section 34 of Chapter 29 the General Laws as appearing in the 2018 Official Edition, is hereby amended by striking out the word “commonwealth” the second time it appears and inserting in place thereof following words:– commonwealth, provided that, a portion of such monies may be deposited as provided in subsection (d).

SECTION 2. Section 34 of said Chapter 29, as so appearing, is hereby further amended by adding after subsection (c) the following subsection:–

(d) A portion of the public monies referred to in subsection (a) may be deposited in accordance with the following conditions: (1) the funds are initially invested through a banking institution as defined in Chapter 167A doing business in the commonwealth that is insured by the Federal Deposit Insurance Corporation and is selected by the treasurer; (2) the selected banking institution arranges for the redeposit of the funds in deposit accounts in one or more banks or savings and loan associations wherever located; and (3) the full amount or principal and any accrued interest of each such deposit account is insured by the Federal Deposit Insurance Corporation.

SECTION 3. Chapter 35 of the General Laws, as so appearing hereby amended by striking out section 22 and inserting in place thereof the following section:–

Section 22. Except as otherwise provided, county treasurers, clerks of the courts, clerks of the district courts, sheriffs and superintendents of jails and houses of correction, probation officers, registers of probate and insolvency and register of deeds, having more money in their hands than is required for immediate use, shall deposit it, in their official names, in national banks, trust companies, savings banks, co-operative banks, federal savings banks or federal savings and loan associations, at the best practicable interest rates. County treasurers may also deposit in time deposits in such national banks, trust companies, savings banks, co-operative banks, federal savings banks or federal savings and loan associations, and invest in United State treasury bills. Interest thereon shall be paid to the county, except that interest accruing to deposits by registers of probate and clerks of courts shall be paid to the Commonwealth; provided, that interest accruing on the deposit as aforesaid of any money paid to any official mentioned in this section which is so paid under order of a court or which is otherwise subject to the direction of a court shall, if the court so directs, be paid to the parties entitled to the principal fund of such deposit.

SECTION 4. Section 4 of Chapter 40G of the General Laws as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:–

Unless otherwise specified, all moneys of the MTDC from whatever source derived shall be paid to the treasurer of the MTDC. Said moneys shall be deposited in the first instance by the treasurer in one or more national banks, trust companies, savings banks, cooperative banks, federal savings banks or federal savings and loan associations in compliance with section 34 of chapter 29. Funds in said accounts shall be paid out on the warrant or other order of the treasurer of the MTDC or of such other person or persons as the board may authorize to execute such warrants or orders.

SECTION 5. Section 55 of Chapter 44 of the General Laws, as so appearing, is hereby amended by striking out, in lines 25 and 26, the words “banking companies or co-operative banks” and inserting the words:–

or cooperative banks or in accordance with the provisions of the second paragraph of section 55B of this chapter.

SECTION 6. Section 55B of Chapter 44, as so appearing, is hereby amended by adding the following paragraph:–

Moneys of any city, town, district or regional school district invested in compliance with this section may be invested in accordance with the following conditions: (1) the moneys are initially invested through a banking institution doing business in the commonwealth selected by the city, town, district or regional school district; (2) the selected banking institution arranges for the redeposit of the moneys in deposit accounts in one or more banks or savings and loan associations wherever located; and (3) the full amount of principal and any accrued interest of each such deposit account is insured by the Federal Deposit Insurance Corporation. The provisions of section 62 shall not apply to this section.

SECTION 7. The General Laws are hereby amended by inserting after chapter 110F the following chapter:-

CHAPTER 110I. UNIFORM REAL PROPERTY ELECTRONIC RECORDINGS

Section 1. SHORT TITLE. This act may be cited as the Uniform Real Property Electronic Recording Act

Section 2. For the purpose of this Act the following words shall, unless the context clearly indicates otherwise, have the following meanings:-

“Document” means information that is:

(A) inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form; and

(B) eligible to be recorded in the land records maintained by the registrar.

“Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

“Electronic document” means a document that is received by the registrar in an electronic form.

“Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with a document and executed or adopted by a person with the intent to sign the document.

“Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

“State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

Section 3. VALIDITY OF ELECTRONIC DOCUMENTS.

(a) If a law requires, as a condition for recording, that a document be an original, be on paper or another tangible medium, or be in writing, the requirement is satisfied by an electronic document satisfying this act.

(b) If a law requires, as a condition for recording, that a document be signed, the requirement is satisfied by an electronic signature.

(c) A requirement that a document or a signature associated with a document be notarized, acknowledged, verified, witnessed, or made under oath is satisfied if the electronic signature of the person authorized to perform that act, and all other information required to be included, is attached to or logically associated with the document or signature. A physical or electronic image of a stamp, impression, or seal need not accompany an electronic signature.

Section 4. RECORDING OF DOCUMENTS.

(a) In this section, paper document means a document that is received by the registrar in a form that is not electronic.

(b) A registrar:

1. who implements any of the functions listed in this section shall do so in compliance with standards established by the Secretary of State.

2. may receive, index, store, archive, and transmit electronic documents.

3. may provide for access to, and for search and retrieval of, documents and information by electronic means.

4. who accepts electronic documents for recording shall continue to accept paper documents as authorized by state law and shall place entries for both types of documents in the same index.

5. may convert paper documents accepted for recording into electronic form.

6. may convert into electronic form information recorded before the registrar began to record electronic documents.

7. may accept electronically any fee or tax that the registrar is authorized to collect.

8. may agree with other officials of a state or a political subdivision thereof, or of the United States, on procedures or processes to facilitate the electronic satisfaction of prior approvals and conditions precedent to recording and the electronic payment of fees and taxes.

Section 5. ADMINISTRATION AND STANDARDS.

(a) The Secretary of State shall adopt standards to implement this act.

(b) To keep the standards and practices of registrars in this state in harmony with the standards and practices of recording offices in other jurisdictions that enact substantially this act and to keep the technology used by registrars in this state compatible with technology used by recording offices in other jurisdictions that enact substantially this act, the Secretary of State, so far as is consistent with the purposes, policies, and provisions of this act, in adopting, amending, and repealing standards shall consider:

1) standards and practices of other jurisdictions;

2) the most recent standards promulgated by national standard-setting bodies, such as the Property Records Industry Association;

3) the views of interested persons and governmental officials and entities; and

4) the needs of counties of varying size, population, and resources.

Section 6. UNIFORMITY OF APPLICATION AND CONSTRUCTION. In applying and construing this Uniform Act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Section 7. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This act modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7001, et seq.) but does not modify, limit, or supersede Section 101(c) of that act (15 U.S.C. Section 7001(c)) or authorize electronic delivery of any of the notices described in Section 103(b) of that act (15 U.S.C. Section 7003(b)).

SECTION 8. Section 21 of chapter 167 of the General Laws, as so appearing, is hereby amended by adding the following three paragraphs:-

Notwithstanding any general law, special act or its organizational documents to the contrary, a financial institution may postpone the annual meeting of its voting body if the Governor has declared a state of emergency for the Commonwealth or the area or areas served by the financial institution. Within sixty days of the termination of the state of emergency the financial institution shall hold an annual meeting postponed under this paragraph unless the next regularly scheduled annual meeting is to be held within one hundred and fifty days of such termination. A postponed annual meeting may be combined with the next annual meeting held within this time period. If notice of the annual meeting has been provided as of the date of the declaration or within ten days after a financial institution may provide notice of the postponement by press release, email notice if previously provide to the financial institution or take other reasonable steps to inform the voting body. During the period of the emergency the financial institution shall retain its current governing body regardless of the expiration of terms or mandatory retirements; may operate under existing policies and procedures and any required annual votes or actions shall also be postponed. The termination or rescission of the state of emergency shall not invalidate any actions taken pursuant to the provisions of this paragraph. . A financial institution postponing an annual meeting under this paragraph shall enter in the records of the next following meeting of its governing body the cause, timing and procedures taken for such action.

Notwithstanding any general law, special act or its organizational documents to the contrary, a financial institution may hold its annual meeting in a virtual or hybrid manner if the Governor has declared a state of emergency in the Commonwealth or in the area or areas served by the financial institution provided that the voting body is able to participate in the meeting, including being able to present questions, telephonically among other options for accessing the meeting. Notice of the meeting shall be in accordance with the law and by-laws of the financial institution and provide all other information for participating by remote communication. A financial institution acting under the authority of this paragraph shall take reasonable steps to verify the attendees that join through a remote communication method and take reasonable steps to provide technical assistance during the meeting for those attending through remote communication. The termination or rescission of the state of emergency shall not invalidate any actions taken pursuant to the provisions of this paragraph. A special meeting of the financial institution may also be conducted under the authority and requirements of this paragraph. A financial institution conducting an annual meeting or special meeting under this paragraph shall enter in the records of the next following meeting of its governing body the cause for such action and the timing and manner in which the meeting was held. An annual or special meeting held under the provisions of this paragraph shall follow all existing health and safety protocols for the state of emergency and any specified time period thereafter.

The following words shall have the following meanings for the preceding two paragraphs, unless the context clearly requires otherwise:-

“Financial institution”, includes a savings or co-operative bank in mutual form, a mutual holding company and its subsidiary banking institution, and a bank in stock form.

“Governing body”, the board of directors, the board of trustees or the board of investment of investment as applicable to the financial institution

“Hybrid meeting”, a meeting held with a combination of limited in-person attendance and remote communication.

“Organizational documents”, the charter, articles of organization, and by-laws of a financial institution

“Remote communication”, the use of telephonic, videoconferencing or other means of participation without being in physical attendance.

“Virtual meeting”, a meeting held solely by remote communication.

“Voting body”, the corporators of a mutual bank or a mutual holding company, the shareholders of a co-operative bank in mutual form, and the stockholders of a bank in stock form with the right to vote at the annual meeting.

SECTION 9. Section 37 of said chapter 167, as so appearing, is hereby amended by striking out the second, third, fourth and fifth paragraphs and inserting in place thereof the following 4 paragraphs:-

Notwithstanding any general or special law to the contrary, a person, domestic or foreign corporation, partnership, association, limited liability company, business trust, joint venture, societies, or similar entity shall not use the name, trade name or trademark of any bank, federal bank, federal branch, foreign bank, out-of-state bank or out-of-state branch or out-of-state federal bank, as defined in section 1, or any federal credit union as defined in section 1 of chapter 171, or any subsidiary thereof, in any advertisement or solicitation for products or services, without the express written consent of the financial institution.

For the purposes of this section, the word “advertisement” or “solicitation” shall mean a communication including but not limited to a writing, email, text message, direct mail, oral solicitation, internet website, letter, brochures, pamphlets displays sales literature and any other form of electronic communication to a specifically identified consumer or which contains specific information on the account or loan of a specifically identified consumer. The word “electronic” shall mean relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

A person, domestic or foreign corporation, partnership, association, limited liability company, business trust, joint venture, societies, or similar entity shall not make reference to an existing bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank as defined in section 1 of this chapter, or federal credit union as defined in section 1 of chapter 171, or any subsidiary thereof, without the express written consent of the bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank or federal credit union, or any subsidiary thereof, or make reference to a loan number, loan amount or other specific loan information on the outside of an envelope, visible through the envelope window, or on a postcard in connection with any advertisement or solicitation for products or services to a specifically identified consumer.

A person, domestic or foreign corporation, partnership, association, limited liability company, business trust, joint venture, societies, or similar entity shall not include a loan number, loan amount or other specific loan information relative to a specifically identified consumer that is publicly available in a advertisement or solicitation for the purchase of products or services unless the solicitation clearly and conspicuously states in bold-face type on the front page of the correspondence that the person, domestic or foreign corporation, partnership, association, limited liability company business trust, joint venture, societies or similar entity is not sponsored by or affiliated with and that the advertisement or solicitation is not authorized by the bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank as defined in section 1, or federal credit union as defined in section 1 of chapter 171, or any subsidiary thereof. The statement shall include the name, address and the telephone number of the person making the advertisement or solicitation and that any loan information referenced was not provided by the bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank or federal credit union, or any subsidiary thereof. The statements required in this paragraph shall also be given at the time of any oral solicitation to a specifically identified consumer.

A person, domestic or foreign corporation, partnership, association, limited liability company, association, business trust, joint venture, societies or similar entity, which is considered to have violated this section, shall be considered to have engaged in an unfair and deceptive practice and shall be a violation of chapter 93A.

SECTION 10. Said chapter 167, as so appearing, is hereby amended by adding the following section:-

Section 52. For the purpose of this section the following words shall, unless the context clearly indicates otherwise, have the following meanings:-

“Core processor”, an entity, other than a financial institution, bank holding company, mutual holding company or credit union service organization, that provides data processing for three or more of the following services to a financial institution:

1)Making and servicing loans

2)Opening new accounts

3)Processing cash deposits and withdrawals

4)Processing payments and checks

5)Managing customer accounts.

6)Maintaining records for all the bank’s transactions.

“Financial institution”, a bank or federal bank as defined in section 1 or a federal credit union as defined in section 1 of chapter 171.

The following unfair methods and unfair and unsafe acts or practices are hereby declared to be unlawful.

(a) It shall be a violation of this section for a core processor in contracting with a financial institution:

1. To require contracts in excess of five years without a commitment to upgrade their products and services to meet safe and sound tenets of banking and compliance with state and federal requirements.

2. Failure to indemnify the financial institution from infringement claims arising out of software or technology products or services provided or licensed by the core processor.

3. To charge excessive or previously undisclosed fees or charges for a financial institution to obtain its own data including tapes of such data.

4. To charge termination penalties from a financial institution that is not the continuing entity upon consummation of a merger with another financial institution, including a merger with and into a financial institution that utilizes the same core processor, (a) that exceed the total of all non-extraordinary assessments for such products or services to such financial institution during the twelve months preceding the merger or combination, or (b) the financial institution terminating or cancelling such agreement has maintained an arrangement for core processing with such provider continuously for no less than six years preceding the merger or combination.

5. To perform abusive audits of existing contracts over extended retroactive periods upon notification by a financial institution that it will not to renew its contract with that core processor.

6. To act to accomplish, either directly or indirectly, through any parent company, subsidiary or agent, what would otherwise be prohibited under this section.

7. To coerce a financial institution to assent to a release, assignment, novation, waiver or estoppel that would prospectively relieve any person from liability imposed by this section.

(b) Any provision of a contract between a core processor and a financial institution or practice thereunder in violation of this section shall be void and unenforceable.

(c) This section shall apply to all contracts between a core processor and a financial institution existing on or after the effective date of this chapter.

SECTION 11. The second paragraph of section 25 of chapter 168, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:-

The directors shall elect the treasurer and may elect or select any other officers as they determine.

SECTION 12. The second paragraph of section 19 of chapter 170, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:-

The directors shall elect the president, the vice-president or vice-presidents, treasurer and may elect or select any other officers as they determine.

SECTION 13. Section 9A of Chapter 172 is hereby amended by inserting after the ninth paragraph the following paragraph:- A limited purpose trust company may be organized as, or converted into, a corporation, a limited liability company, or any other form of legal entity subject to Chapter 172 and to terms and conditions imposed by the commissioner.

SECTION 14. The second paragraph of section 13 of said chapter 172, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:-

The directors shall elect the treasurer and may elect or select any other officers including an executive vice-president as they determine.

SECTION 15. Section 2 of chapter 183C of the General Laws, as so appearing, is hereby amended by striking out the definition of “High cost home mortgage loan” and inserting in place thereof the following definition:– “High cost home mortgage loan”, a consumer credit transaction that is secured by the borrower’s principal dwelling, other than a reverse mortgage transaction, with an annual percentage rate or fees which exceed the limitations set pursuant to regulations issued by the Commissioner of Banks which shall be no less protective than limitations set forth at 12 CFR 1026.32(a)(1).

SECTION 16. Said chapter 183C, as so appearing, is hereby further amended by striking out section 3 and inserting in place thereof the following section:–

Section 3. A creditor may not make a high-cost home mortgage loan without first receiving certification from a counselor in accordance with the requirements pursuant to 209 CMR 32.34(1) or 12 CFR 1026.34(a)(5). A high cost home mortgage loan originated by a lender in violation of this section shall not be enforceable.

SECTION 17. Section 4 of said chapter 183C, as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:– There shall be a presumption that the borrower is able to make the scheduled payments if, at the time the loan is made, the lender has complied with 209 CMR 32.43 or 12 CFR 1026.43 in determining the borrower’s ability to repay.

SECTION 18. Section 6 of said chapter 183C, as so appearing, is hereby amended by striking out, in lines 2 and 3, the following words:– “greater than 5 per cent of the total loan amount or $800, whichever is greater”.

SECTION 19. Section 7 shall take effect on January 1, 2023.

Name:	District/Address:	Date Added:
Daniel Cahill	10th Essex	2/18/2021