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General Laws

Section 15. 1. As used in this section the following words shall have the following meanings:

(a) “Nonfederally-insured bank”, any bank, except a credit union as defined in section one of chapter one hundred and seventy-one, which is subject to supervision by the commissioner, which is not a “member” of a Federal Home Loan Bank as defined in Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422), and the deposits of which are not insured in accordance with the provisions of the Federal Deposit Insurance Act (12 U.S.C. 1811-1831);

(b) “Insured nonmember bank”, the same meaning that such term has in the Federal Deposit Insurance Act;

(c) “Member”, the same meaning that such term has in the Federal Home Loan Bank Act;

(d) “Insured institution”, the same meaning that such term has in section 401(a) of the National Housing Act (12 U.S.C. 1724(a));

(e) “Deposits”, all deposits authorized under section two; and

(f) “Affiliate”, the same meaning that such term has in section 2(b) of the Banking Act of 1933 (12 U.S.C. 221a), except that the term “member bank”, as used in said section 2(b), shall be deemed to refer to a nonfederally-insured bank.

2. The advertising and payment of interest on deposits, shares or withdrawable accounts, shall be subject to regulation by the commissioner as herein provided. Said commissioner may, from time to time, prescribe rules and regulations governing the payment and advertisement of interest on deposits, including limitations on the rates of interest that may be paid on deposits, by all nonfederally-insured banks. Said commissioner may prescribe different rate limitations for different classes of deposits, for deposits of different amounts or with different maturities or subject to different conditions regarding withdrawal or repayment, according to the nature or location of such nonfederally-insured banks or their depositors, or according to such other reasonable bases as the commissioner may deem desirable in the public interest. The commissioner is authorized, for the purposes of this section to classify types of deposit, to determine what shall be deemed a payment of interest and to prescribe such regulations as he may deem necessary to effectuate the purposes of this section and to prevent evasions thereof. Such regulations shall prohibit any nonfederally-insured bank from paying any time deposit before its maturity except upon such conditions and in accordance with such rules and regulations as may be prescribed by the commissioner and from waiving any requirement of notice before payment of any deposit except as to all deposits having the same requirement. The provisions of this section and of regulations hereunder shall also apply, in the discretion of the commissioner, to obligations other than deposits that are undertaken by nonfederally-insured banks or their affiliates for the purpose of obtaining funds to be used in the banking business. The commissioner shall also have any such authority with respect to nonfederally-insured banks as the board of directors of the Federal Deposit Insurance Corporation now has or may in the future have with respect to insured nonmember banks pursuant to Section 18(g) of the Federal Deposit Insurance Act (12 U.S.C. 1828(g)) and as the Federal Home Loan Bank Board now has or may in the future have with respect to members and insured institutions pursuant to Section 5B of the Federal Home Loan Bank Act (12 U.S.C. 1425b). Any authority conferred on the commissioner by this section with respect to nonfederally-insured banks shall be effective only during such time as the board of directors of the Federal Deposit Insurance Corporation shall have comparable authority with respect to insured nonmember banks or as the Federal Home Loan Bank board shall have comparable authority with respect to members and insured institutions.

3. (a) Whenever it appears to the commissioner that any bank is engaged or has engaged or is about to engage in any act or practice which constitutes or will constitute a violation of the provisions of this section or of any regulation hereunder, the commissioner may, in his discretion, bring an action in the superior court for the county in which the principal office of such bank or association is located to enjoin such act or practice, to enforce compliance with this section or any regulation prescribed hereunder or for a combination of the foregoing, and such court shall have jurisdiction of such action, and, upon a proper showing, an injunction, restraining order or other appropriate order may be granted without bond.

(b) In addition to any other penalty provided by this or any other law, any bank, subject to this section, which violates a rule promulgated pursuant to this section shall be subject to such civil penalties, which shall not exceed one hundred dollars for each violation, as may be prescribed by the commissioner by regulation, and such regulation may provide, with respect to any or all such violations, that each day on which the violation continues shall constitute a separate violation. The commissioner may recover any such civil penalty for his own use, through action or otherwise, including recovery thereof in any other action or proceeding under this section. The commissioner may, at any time before collection of any such penalty, whether before or after the bringing of an action or other legal proceeding, the obtaining of any judgment or other recovery or the issuance or levy of any execution or other legal process therefor, and with or without consideration, compromise, remit or mitigate in whole or in part any such penalty of any such recovery.

4. Any regulation made by the commissioner pursuant to the authority conferred by this section shall be subject to the provisions of chapter thirty A, except that the commissioner may from time to time change the maximum rate of interest on deposits without holding a public hearing by publishing in a newspaper or newspapers of general circulation in the commonwealth selected by the commissioner, and delivering to any banks subject to such maximum rate, a notice which states the substance of the proposed maximum rate limitation and fixes an effective date for such limitation not earlier than thirty days after the date of publishing or delivering such notice.

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