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General Laws

Section 38. No foreign bank shall, except as herein provided, transact a banking business in the commonwealth, other than as provided in chapter one hundred and sixty-seven B; provided, however, that the board of bank incorporation may, conditioned upon the performance of such requirements as to auditing as the board may prescribe, grant a certificate authorizing the same to any such bank. Said board, upon application thereof which shall be accompanied by an investigation fee, the amount of which shall be determined annually by the commissioner of administration under the provisions of section three B of chapter seven, except that such fee shall not be less than ten thousand dollars, may grant such certificate in accordance with the provisions of this section. Any such bank transacting banking business in the commonwealth pursuant to such certificate shall be subject to the commissioner and shall comply with all laws of the commonwealth applicable to a Massachusetts bank.

In deciding whether or not to issue such certificate, the board shall determine whether the applicant is adequately capitalized, as defined in the Federal Deposit Insurance Act 12 USC 1811 et seq., whether competition among banking institutions will be unreasonably affected and whether public convenience and advantage will be promoted. In making such determination, the board shall consider, but not be limited to, the applicant’s record of compliance with all applicable community reinvestment requirements and a showing of net new benefits. For the purposes of this section, the term “net new benefits” shall mean initial capital investments, job creation plans, consumer and business services including small business loans, farm loans, commitments to maintain and open branch offices within a bank’s delineated local community, as such term is used within section fourteen, and such other matters as the board may deem necessary or advisable.

The board shall not issue such certificate until it has received notice from the Massachusetts Housing Partnership Fund established by section thirty-five of chapter four hundred and five of the acts of nineteen hundred and eighty-five, that arrangements satisfactory to such fund have been made for such foreign bank to make ninety hundredths of one percent of its assets in the commonwealth available for call by said fund for a period of ten years for the purpose of providing loans to said fund for financing, down payment assistance, share loans, closing costs and other costs related to creating affordable rental housing, limited equity cooperatives and affordable home ownership opportunities, and tenant management programs and tenant unit acquisition or ownership programs in state funded public housing developments. All of the benefits and assistance provided by said fund under funds made available by this section shall be to persons with incomes of less than eighty percent of the area-wide median income as determined from time to time by the United States Department of Housing and Urban Development; provided, however, that at least twenty-five percent of such assistance shall be to persons with incomes of less than fifty percent of said area-wide median income. All loans made to the fund by such banks shall be deemed to be legal investments for such banks; provided, however, that (a) such loans shall be evidenced by notes, or other evidence of indebtedness of the fund, which shall bear interest at rates approved by the commissioner which shall be based upon the costs, not to include any so-called lost opportunity costs, incurred by the bank in making funds available to the fund; provided, however, that the fund may, by agreement with such bank, accept a reduction in the amount of said call based upon a lower rate of interest; and (b) no loan to the fund shall be secured in any manner unless all outstanding loans to the fund shall be secured equably and ratably in proportion to the unpaid balance of such loans and in the same manner.

Said fund shall file with the commissioner a report subsequent to any call to borrow funds pursuant to this section. Such report shall contain the total amount of the call, the allocation of the call to each such bank, the amount loaned by each to the fund, and the rate of interest thereon. Said report shall be filed within sixty days of any such call.

No such certificate shall be issued until the board has received written assurances from such foreign bank that a resident or residents of the commonwealth shall occupy a position of an executive officer in any resulting Massachusetts bank or Massachusetts branch. For the purposes of this section, the term “executive officer” shall have the same meaning as contained in section four of chapter one hundred and sixty-seven A.

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