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  • Acts
  • 1998
  • Chapter 222 AN ACT RELATIVE TO BANKING LAWS.

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 97 of chapter 140 of the General Laws, as appearing in the 1996 Official Edition, is hereby amended by striking out, in line 14, the words "a year" and inserting in place thereof the following words:- in every two calendar years.

SECTION 2. Section 2 of chapter 167E of the General Laws, as so appearing, is hereby amended by inserting after the word "loans", in lines 2 and 27, in each instance, the following words:- primarily for the purpose of being held for its own account.

SECTION 3. Said section 2 of said chapter 167E, as so appearing, is hereby further amended by adding the following subsection:-

C. Any such bank may make or acquire any mortgage residential real estate loan, other than a reverse mortgage loan, on a dwelling house with accommodations for four or less separate households and occupied, or to be occupied, in whole or in part by the mortgagor; provided, however, that such mortgage loan is saleable in the secondary market or is underwritten in accordance with mortgage loan programs of public instrumentalities created by the commonwealth for the purpose of financing and expanding the supply of residential mortgages or affordable housing.

SECTION 4. The first paragraph of section 2 of chapter 167F of the General Laws, as so appearing, is hereby amended by striking out paragraphs 6 and 7 and inserting in place thereof the following two paragraphs:-

6. To invest such amount not exceeding 10 per cent of its capital stock, surplus account, and undivided profits for a stock corporation and not exceeding 10 per cent of its surplus account for a thrift institution or any other such amount which may be authorized under 12 USC section 618,

whichever is the greater, as the commissioner may approve in the capital stock of one or more corporations organized under the laws of the United States for the purpose of engaging in international or foreign banking or other internal or foreign financial operations, or in banking or other financial operations in a dependency or insular possession of the United States, and subject to the jurisdiction and supervision of the Board of Governors of the Federal Reserve System.

7. To invest subject to the approval of the commissioner and under such limitations or conditions as he may impose, in the capital stock or shares of one or more wholly owned subsidiary corporations, limited liability corporations or trusts or such other forms of organization permitted by the commissioner, organized and operated solely for the purpose of performing functions that the bank itself is empowered to perform directly.

SECTION 5. Paragraph 2 of section 11 of chapter 168 of the General Laws, as so appearing, is hereby amended by adding the following paragraph:-

Upon application in writing by any such corporation the commissioner may waive or modify the information in clauses (a) and (b) to be included in such report.

SECTION 6. Said chapter 168 is hereby further amended by striking out sections 17 and 18, as so appearing, and inserting in place thereof the following two sections:-

Section 17. The by-laws of the corporation may provide for any and all matters relative to the business and affairs of the corporation as appropriate to exercise all powers necessary, convenient or incidental to the purposes for which the corporation was formed.

Section 18. Officers and employees of such corporation shall be bonded to the extent and in the form determined by the board of trustees.

SECTION 7. Section 26 of said chapter 168, as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:-

Each such corporation shall prepare a balance sheet, in accordance with generally accepted accounting principles, which presents fairly its condition as of the last business day of its fiscal year. A copy of said balance sheet shall be made available to a depositor upon request.

SECTION 8. Section 7 of chapter 170 of the General Laws, as so appearing, is hereby amended by striking out the last paragraph and inserting in place thereof the following paragraph:-

The by-laws may also provide for such other matters relative to the business and affairs of the corporation as appropriate to exercise all powers necessary, convenient or incidental to the purposes for which the corporation was formed.

SECTION 9. Said chapter 170 is hereby further amended by striking out section 15, as so appearing, and inserting in place thereof the following section:-

Section 15. Officers and employees of such corporation shall be bonded to the extent and in the form determined by the board of directors.

SECTION 10. Section 18 of said chapter 170, as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:-

Each such corporation shall prepare a balance sheet, in accordance with generally accepted accounting principles, which presents fairly its condition as of the last business day of its fiscal year. A copy of said balance sheet shall be made available to a depositor upon request.

SECTION 11. Section 3 of chapter 171 of the General Laws, as so appearing, is hereby amended by adding the following paragraph:-

Notwithstanding any other provision of this chapter, a community development credit union may be organized subject to the approval of the commissioner under such procedures, terms and conditions as said commissioner may impose. A community development credit union shall demonstrate to the satisfaction of said commissioner that most of its members are of low to moderate income or it intends to primarily serve low to moderate income individuals or areas. Such a credit union may accept shares or deposits from nonmembers.

SECTION 12. Said chapter 171 is hereby further amended by striking out section 27, as so appearing, and inserting in place thereof the following section:-

Section 27. Each such corporation shall prepare a balance sheet, in accordance with generally accepted accounting principles, which presents fairly its condition as of the last business day of its fiscal year. A copy of said balance sheet shall be made available to a depositor upon request.

SECTION 13. Section 11 of chapter 172 of the General Laws, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following two sentences:- Such corporation may adopt by-laws for the proper management of its affairs and as appropriate to exercise all powers necessary, convenient or incidental to the purposes for which the corporation was formed. It may also establish regulations controlling the assignment and transfer of its shares.

SECTION 14. Said chapter 172 is hereby further amended by striking out section 15, as so appearing, and inserting in place thereof the following section:-

Section 15. The officers of such corporation shall be a president, clerk or secretary, treasurer and such other officers as may be prescribed in accordance with its by-laws and they shall be sworn to the faithful performance of their duties. Officers and employees of such corporation shall be bonded to the extent and in the form determined by the board of directors.

SECTION 15. The first paragraph of section 19 of said chapter 172, as so appearing, is hereby amended by striking out the first sentence.

SECTION 16. Section 22 of said chapter 172, as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:-

Each such corporation shall prepare a balance sheet, in accordance with generally accepted accounting principles, which presents fairly its condition as of the last business day of its fiscal year. A copy of said balance sheet shall be made available to a depositor upon request.

SECTION 17. Said chapter 172 is hereby further amended by striking out section 28, as so appearing, and inserting in place thereof the following section:-

Section 28. The directors of a trust company may annually, semi-annually or quarterly, but no more frequently, declare such dividends as they deem judicious to be paid from net profits. No dividends shall be declared, credited or paid so long as there is any impairment of capital stock. No trust company having outstanding preferred stock shall, except as otherwise authorized by the commissioner, declare dividends upon common stock for any period other than a period for which dividends are declared upon preferred stock.

The approval of said commissioner shall be required if the total of all dividends declared by a trust company in any calendar year shall exceed the total of its net profits for that year combined with its retained net profits of the preceding two years, less any required transfer to surplus or a fund for the retirement of any preferred stock.

For the purposes of this section, the words net profits shall mean the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets after deducting from the total thereof all current operating expenses, actual losses, accrued dividends on preferred stock, if any, and all federal and state taxes.

Approved August 6, 1998.