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  • Acts
  • 1998
  • Chapter 163 AN ACT FURTHER REGULATING BOARD MEETINGS BY BANKS.

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 11 of chapter 168 of the General Laws, as appearing in the 1996 Official Edition, is hereby amended by inserting after the third sentence the following two sentences:- Unless the articles of incorporation or the by-laws otherwise provide, members of the board of trustees or any committee designated thereby may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may simultaneously hear each other, and participation by such means shall constitute presence in person at a meeting. Members may transmit any written authorizations that may be required during the meeting by electronic facsimile or other commercially acceptable transmission.

SECTION 2. Paragraph 2 of said section 11 of said chapter 168, as so appearing, is hereby amended by inserting after the word "corporation", in line 23, the following words:- which in the aggregate total in an amount in excess of $50,000 to any borrower,- and by inserting after the word "loans", in line 37, the following words:- in excess of $25,000 each.

SECTION 3. Said paragraph 2 of said section 11 of said chapter 168 is hereby further amended by adding the following sentence:- Upon application in writing by any such board of trustees, the commissioner in his discretion may waive or modify the list of transactions to be included in such report.

SECTION 4. The second paragraph of section 7 of chapter 170 of the General Laws, as so appearing, is hereby amended by striking out clause (a) and inserting in place thereof the following clause:-

(a) The time and place for holding the annual meeting of the shareholders and the periodic meeting of the board of directors.

SECTION 5. Said second paragraph of said section 7 of said chapter 170, as so appearing, is hereby further amended by adding the following paragraph:-

The board of directors shall meet at intervals of not more than two months; provided however, that upon application in writing by the corporation, the commissioner may waive or modify this requirement. Unless the articles of incorporation or the by-laws otherwise provide, members of the board of directors or any committee designated thereby may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may simultaneously hear each other, and participation by such means shall constitute presence in person at a meeting. Members may transmit any written authorizations that may be required during the meeting by electronic facsimile or other commercially acceptable transmission.

SECTION 6. Chapter 172 of the General Laws is hereby amended by striking out section 16, as so appearing, and inserting in place thereof the following section:-

Section 16. The board of directors shall meet at intervals of not more than two months; provided however, that upon application in writing by the corporation, the commissioner may waive or modify this requirement. Unless the articles of incorporation or the by-laws otherwise provide, members of the board of trustees or any committee designated thereby may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may simultaneously hear each other, and participation by such means shall constitute presence in person at a meeting. Members may transmit any written authorizations that may be required during the meeting by electronic facsimile or other commercially acceptable transmission. At intervals of not more than two months each, the treasurer or any other officer designated by the board of directors shall submit to a meeting of the board of directors a written report, over his signature, for the period running from the closing date of the last report to a date not more than 18 days prior to the date of the meeting at which the report is submitted. Such report shall be filed with the records of the meeting and shall be retained for a period of six years from the date of the meeting; such report shall cover the following transactions:

(1) All changes in investments, including a list of the securities purchased or sold.

(2) All changes in any reserve or contingency account, however designated, and an itemized list of the credits and debits to profit and loss and reserve accounts.

(3) Lists of the following loans, the date thereof, and the date to which interest has been paid, setting forth the total liabilities of the borrower to the corporations, both secured and unsecured:

(a) all loans in excess of $50,000 each, overdue for more than 30 days, other than real estate mortgage loans;

(b) all real estate mortgage loans on which interest is more than six months in arrears;

(c) all real estate mortgage loans concerning which any tax upon the underlying security has been paid by and not repaid to such corporations, specifying the amounts of taxes paid and the years for which they were paid;

(d) all real estate mortgage loans concerning which any tax upon the underlying security is more than 12 months overdue; and

(e) all real estate mortgage loans concerning which any tax upon the underlying security has been paid by and not repaid to such corporations, specifying the amounts of taxes so paid and the years for which they were paid.

(4) A list of all loans, secured or unsecured, and discounts of any borrower including both direct and indirect liabilities made during which period which brings the aggregate of the liabilities of such borrower to an amount in excess of $50,000, with a notation of any line of credit possessed by such borrower.

Upon application in writing by any such corporation the commissioner in his discretion may waive or modify the list of transactions to be included in such report.

SECTION 7. Paragraph B of section 99 of chapter 272 of the General Laws, as so appearing, is hereby amended by adding the following two paragraphs:-

17. The term "financial institution" shall mean a bank, as defined in section 1 of chapter 167, and an investment bank, securities broker, securities dealer, investment adviser, mutual fund, investment company or securities custodian as defined in section 1.165-12(c)(1) of the United States Treasury regulations.

18. The term "corporate and institutional trading partners" shall mean financial institutions and general business entities and corporations which engage in the business of cash and asset management, asset management directed to custody operations, securities trading, and wholesale capital markets including foreign exchange, securities lending, and the purchase, sale or exchange of securities, options, futures, swaps, derivatives, repurchase agreements and other similar financial instruments with such financial institution.

SECTION 8. Subparagraph 1 of paragraph D of said section 99 of said chapter 272, as so appearing, is hereby amended by adding the following clause:-

f. for a financial institution to record telephone communications with its corporate or institutional trading partners in the ordinary course of its business; provided, however, that such financial institution shall establish and maintain a procedure to provide semi-annual written notice to its corporate and institutional trading partners that telephone communications over designated lines will be recorded.

Approved July 3, 1998.