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  • Acts
  • 1998
  • Chapter 474 AN ACT RELATIVE TO CERTAIN ACTIONS OF THE BOARD OF BANK INCORPORATION AND THE COMMISSIONER OF 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. Chapter 167 of the General Laws is hereby amended by striking out sections 26 and 26A, as appearing in the 1996 Official Edition, and inserting in place thereof the following three sections:-

Section 26. The commissioner may, under his hand and official seal, appoint agents to assist him in the duty of liquidation and distribution. The certificates of the appointment of such agents shall be filed in the office of the commissioner and certified copies thereof shall be filed in the office of the clerk of the supreme judicial court. Said commissioner may from time to time authorize such agents to perform such duties connected with said liquidation and distribution as he deems proper. Said commissioner may procure such expert assistance and advice as he considers necessary in the liquidation and distribution of the assets of such bank and he may retain such officers or employees of the bank as he deems necessary. Said shall require, from a special agent and from such assistants, such security for the faithful discharge of their duty as he deems proper.

Said commissioner may, under his hand and official seal, appoint a federal agency as the liquidating agent of a bank insured by the Federal Deposit Insurance Corporation. Upon its acceptance of the appointment, the agency as liquidating agent shall acquire both legal and equitable title to all of the assets, rights or claims and to all of the real or personal property of the closed bank. The agency as liquidating agent shall have the power to perform all acts and duties of said commissioner in the liquidation of the closed bank. Said commissioner shall petition the supreme judicial court for an order confirming the appointment of the agency as liquidating agent of such bank.

Whenever a federal deposit insurance agency pays or makes available for payment the insured deposit liabilities of a closed bank, it shall become subrogated to all of the rights of the owners of the deposits against the closed bank, whether or not it has become receiver thereof, in the same manner and to the same extent as it would be subrogated in the closing of a national banking association as provided in 12 USC 1811 et seq. For the purposes of this section and section 26A, a federal agency shall mean the Federal Deposit Insurance Corporation, any successor to such corporation, or any other agency or instrumentality of the United States.

Section 26A. Whenever a federal agency, as defined in section 26, is named as liquidating agent of a banking institution as defined in section 1 of chapter 167A, the board of Bank Incorporation or the commissioner of banks, in order to assist such agency, may exercise its authority under said chapter 167A, chapter 168, chapter 170, and chapter 172 without regard to notice of hearing requirements to effect a resolution.

Section 26B. The commissioner may, under his hand and official seal, appoint the National Credit Union Administration Board as the liquidating agent of a credit union insured by said National Credit Union Administration Board. Upon its acceptance of the appointment, said board as liquidating agent shall acquire both legal and equitable title to all of the assets, rights or claims and to all of the real or personal property of such closed credit union. Said board shall have the power to perform all acts and duties of the commissioner in the liquidation of such closed credit union. Further, said board may also as liquidating agent aid in the liquidation of a credit union insured by it in the same manner and to the same extent as the Massachusetts Credit Union Share Insurance Corporation may aid in the liquidation of a credit union insured by that corporation, as provided in chapter 171.

Whenever the National Credit Union Administration Board pays or makes payment of the insured share and deposit liabilities of a closed credit union, it shall become subrogated to all of the rights of the member and owner of the shares and deposits against the closed credit union, whether or not it becoms receiver thereof in the same manner and to the same extent as it would be subrogated in the closing of a federal credit union as provided in 12 U.S.C. section 1781.

SECTION 2. Said chapter 167 is hereby further amended by inserting after section 36, as so appearing, the following section:-

Section 36A. In addition to all other powers conferred upon the commissioner by law, whenever said commissioner considers it necessary to conserve the assets of any bank for the benefit of the depositors and creditors thereof, said commissioner may, under his hand and official seal, appoint a conservator for such bank, and require of such conservator such bond and security as said commissioner may consider proper.

A certificate of the appointment of such conservator shall forthwith be filed in the office of said commissioner. The conservator, with the approval of said commissioner, may procure such expert assistance and advice as necessary in the administration of the affairs of such bank and with like approval may retain such of the officers and employees of such bank as said conservator considers necessary.

The conservator, under the direction and subject to the control of said commissioner, shall take possession forthwith of the property and business of such bank and take such action necessary to carry on its business and to conserve its assets, pending further disposition thereof, as provided by law.

Upon taking possession of the property and business of a bank, the conservator shall forthwith give notice thereof to all persons holding or having possession of any assets of such bank. No bank, trust company, association, firm or individual, knowing that a conservator has taken such possession, or having been notified thereof as aforesaid, shall have a lien or charge for any payment advance or clearance thereafter made, or liability thereafter incurred, against any of the assets of the bank of whose property and business the conservator shall have taken possession as aforesaid, except as otherwise provided in this section.

During the time such conservator remains in possession of such bank the rights of all parties with respect thereto shall, subject to the other provisions of this section, be the same as if said commissioner had taken possession of such bank.

Such conservator, subject to such orders, rules and regulations as may be prescribed from time to time by said commissioner, may collect moneys due to
the bank, and do all acts necessary to continue its business or to conserve its assets. Such conservator shall collect all debts due and claims belonging
to it, and with the approval of the commissioner, may sell or compound all bad or doubtful debts, and on like approval may sell all, or any part of, the real
and personal property of the bank on such terms as said commissioner shall approve; and, in the name of such bank may take a mortgage on such real
property from a bona fide purchaser to secure the whole or a part of the purchase price, upon such terms and for such periods as said commissioner may
approve.

To execute and perform the powers and duties conferred upon him, the conservator may, in the name of any such bank prosecute and defend all suits and other legal proceedings and may, in the name of the bank, execute, acknowledge and deliver all deeds, assignments, releases and other instruments necessary and proper to effectuate any sale of real or personal property or any compromise approved by the commissioner; and any deed or other instrument executed pursuant to the authority hereby given, shall be valid and effective for all purposes to the same extent as though executed by the officers of the bank by authority of its board of directors or of its stockholders.

Such conservator, and his assistants, shall be subject to all the penalties, and except as provided in this section to all other provisions of law, to which agents appointed by said commissioner for the purpose of liquidating the affairs of a bank are subject.

While a bank in the hands of a conservator, said commissioner may require the conservator to set aside and make available for withdrawal by depositors and for payment to other creditors such amounts or proportions of their deposits or claims in any department thereof as said commissioner may deem necessary or expedient and may authorize the conservator to receive new deposits, as provided in section 3 of chapter 59 of the acts of 1933.

Whenever any bank shall have resumed business with or without a reorganization, or whenever said commissioner shall have taken possession of its property or business as provided in section 22 of chapter 167, the provisions of section 3 of chapter 59 of the acts of 1933 with respect to the segregation of new deposits received under this section shall no longer apply and the deposits received thereunder shall be disposed of in such manner as said commissioner shall direct, unless the owner of any such deposit, within 15 days after notice given by the conservator or the commissioner in such manner as said commissioner shall prescribe, shall have withdrawn the same.

The compensation of the conservator and of counsel, employees and assistants and all other expenses of such conservatorship, including costs and expenses incurred by said commissioner in relation to such bank, shall be fixed by said commissioner and approved by the governor and paid out of the funds of such bank; provided, however, that the compensation paid the conservator shall in no event be at a higher rate than the highest salary established in said bank and that the total payroll of the bank at the time of the appointment of the conservator shall not be increased by reason of such compensation; and provided, further, that said commissioner may, subject to approval of the governor, upon the written request of any such bank increase the compensation of the conservator for good cause to an amount not to exceed an additional 50 per cent of the compensation paid to the chief executive officer of that bank.

If said commissioner is satisfied that it may be safely done and that it would be in the public interest, he may terminate the conservatorship and permit such bank to resume business subject to such terms, conditions, restrictions or limitations as he may prescribe.

Nothing contained in this section shall, unless otherwise expressly provided herein, be deemed to abridge any power or authority to take possession of a bank conferred upon said commissioner by this chapter or any power or authority conferred by any other provision of law.

The supreme judicial court, or any justice thereof, shall have jurisdiction in equity to enforce the provisions of this section, and to act upon all applications and in all proceedings thereunder.

SECTION 3. Section 5 of chapter 168 of the General Laws, as appearing in the 1996 Official Edition, is hereby amended by striking out, in line 10, the
words "six months" and inserting in place thereof the following words:- one year.

SECTION 4. Said section 5 of said chapter 168, as so appearing, is hereby further amended by adding the following paragraph:-

Upon notice from the subscribers that the proposed savings bank is ready to commence business, the board shall determine that all requirements of law
have been complied with, that the bank is a member of the Federal Deposit Insurance Corporation or any successor of the corporation, and that the
qualifications of personnel are satisfactory. Upon making such determination, the board shall, if satisfied that public convenience and advantage will be
promoted thereby, issue a certificate authorizing such bank to begin the transaction of business. No such bank shall begin the transaction of business
until such a certificate has been granted.

SECTION 5. Section 4 of chapter 170 of the General Laws, as so appearing, is hereby amended by striking out, in line 10, the words "six months" and
inserting in place thereof the following words:- one year.

SECTION 6.
Said section 4 of said chapter 170, as so appearing, is hereby further amended by adding the following paragraph:-

Upon notice from the subscribers that the proposed cooperative bank is ready to commence business, the board shall determine that all requirements of
law have been complied with, that the bank is a member of the Federal Deposit Insurance Corporation or any successor of the corporation, and that the
qualifications of personnel are satisfactory. Upon making such determination, the board shall, if satisfied that public convenience and advantage will be
promoted thereby, issue a certificate authorizing such bank to begin the transaction of business. No such bank shall begin the transaction of business
until such a certificate has been granted.

SECTION 7. Chapter 171 of the General Laws is hereby amended by striking out section 6, as so appearing, and inserting in place thereof the following
section:-

Section 6. If it appears that all requirements of law have been complied with, that the credit union will have its shares and deposits insured by a federal agency and that the qualifications of the personnel are satisfactory, the commissioner, shall, if satisfied that the proposed field of operation is favorable to the success of such corporation and that the standing of the proposed incorporators is such as to give assurance that its affairs will be administered in accordance with the spirit of this chapter, issue a certificate authorizing such corporation to begin the transaction of business.No such corporation shall begin the transaction of business until such a certificate has been granted.

No credit union shall receive any deposits or payments on account of shares or make any loans, until its by-laws have been approved in writing by
the commissioner.

A credit union shall organize and commence business within one year from the date of its incorporation, otherwise its charter shall be void.

So much of chapter 167 as relates to supervision by the commissioner shall apply to credit unions so far as applicable.

For the purpose of this section, a federal agency shall mean the National Credit Union Administration any successor entity or any other agency or instrumentality of the United States which insures shares and deposits in credit unions.

SECTION 8. Sections 40 to 47, inclusive, of chapter 172 of the General Laws are hereby repealed.

Approved January 15, 1999.