Section 18. An officer or director of a trust company, except as provided in this section, shall not borrow from or otherwise become indebted to a trust company of which he is an officer or director, and a trust company, except as provided in this section, shall not make a loan or extend credit in any other manner to any of its officers or directors. With the prior approval of a majority of the entire board of directors, excluding a member of that board involved in the loan or extension of credit, a trust company may loan or extend credit to an officer and the officer may become indebted to the trust company in an amount not exceeding $100,000 on a loan or extension of credit, secured or unsecured, and in an amount not exceeding $200,000 on a loan or extension of credit intended or secured for educational purposes, and in an amount not exceeding $750,000 on a loan secured by a mortgage on real estate improved with a 1 to 4 family dwelling or a condominium established in accordance with chapter 183A which is to be occupied, in whole or in part, by the officer. A trust company may make a loan or extension of credit to a director, who is not an officer of the trust company, subject to the limitations contained in chapter 167E. The trust company shall not give a preferential rate of interest or other preferential terms on a loan or extension of credit to an officer or to a director. For the purposes of this section, the term “officer” shall mean a president, executive vice-president, senior vice-president or treasurer, and any other officer who participates in major policy functions of the trust company whether or not: (1) such other officer has an official title; but the term shall not include a person who may have an official title and may exercise a certain measure of discretion in the performance of his duties, including discretion in the making of loans, but who does not participate in the determination of major policies of the trust company and whose decisions are limited by policy standards fixed by the senior management of the trust company; (2) the title designates the officer an assistant; or (3) the officer is serving without salary or compensation.
An officer, whether acting individually or as trustee holding property in trust for another person, shall not become the owner of real estate upon which a mortgage is held by the corporation; but, provided, however, that this prohibition shall not apply to an officer who becomes the owner of real estate upon which a mortgage is held by the corporation securing a loan in an amount not exceeding $750,000 dollars on real estate improved with a 1 to 4 family dwelling or a condominium established in accordance with chapter 183A which is to be occupied, in whole or in part, by the officer. This section shall not apply to loans made to an officer on deposit books, or to loans as are guaranteed or insured in whole or in part as authorized by chapter 46 of the acts of 1945 or by regulations thereunder.
Such trust company shall be required to make an annual report to the commissioner of any loan or extension of credit in any manner (i) to any officer, director or principal shareholder of said trust company, (ii) to any officer, director or principal shareholder of a bank holding company, as defined in chapter one hundred and sixty-seven A, of which said trust company is a subsidiary, and (iii) to any officer, director, trustee or principal shareholder of any other subsidiary of said bank holding company. Said trust company shall also be required to make an annual report to the commissioner of any loan or extension of credit in any manner to a company which is controlled by any officer, director, trustee or principal shareholder of said trust company, bank holding company or other subsidiary or in which any such person is a principal shareholder. For the purposes of this section, the terms “company”, “control of a company” and “principal shareholder” shall have the same meanings given in Regulation O of the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 215.2.
Said report to the commissioner shall consist of, but not be limited to, the following: (a) the name of the officer, director, trustee or principal shareholder of said trust company, bank holding company or other subsidiary to whom any loan or extension of credit has been made or the name of such company to which any such loan or extension of credit has been made, (b) the original amount of the loan and the interest rate thereon, (c) the date of the loan, (d) the type of loan, (e) if the loan is secured in any manner, the type of secured asset and its valuation, (f) the terms of the payment, (g) the current balance, and (h) the amount of principal or interest payments in default, if any, and the length of such default. Such report shall be deemed to be a public record in accordance with the provisions of section ten of chapter sixty-six.