Whereas , The deferred operation of this act would tend to defeat its purpose, which is to provide forthwith for improved corporate governance of the Massachusetts Credit Union Share Insurance Corporation, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
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. The last paragraph of section 4 of chapter 294 of the acts of 1961, as appearing in section 1 of chapter 306 of the acts of 1973, is hereby amended by striking out, in line 5, the word "fifteen" and inserting in place thereof the following figure:- 60.
SECTION 2. The first paragraph of said section 4 of said chapter 294 is hereby amended by striking out paragraph (a), as appearing in section 2 of chapter 278 of the acts of 1982, and inserting in place thereof the following paragraph:-
(a) Eleven directors shall be elected from the member credit unions; but any person who is serving as a director on the effective date of this paragraph shall be eligible to be re-elected to the office upon the expiration of his then current term of office and each successive term, if any, notwithstanding the following sentence. Directors elected from the membership shall serve in the capacity of president or chief executive officer, or equivalent, of the member credit union at the time of their election.
SECTION 3. The first paragraph of section 5 of said chapter 294, as amended by chapter 234 of the acts of 1987, is hereby further amended by striking out, in line 2, the word "sixty" and inserting in place thereof the following figure:- 125.
SECTION 4. Section 6D of said chapter 294, as most recently amended by section 4 of chapter 115 of the acts of 1996, is hereby amended by adding the following paragraph:-
(l) An excess member shall, upon request, make its financial records available to the corporation for an insurance review. The corporation shall, at its discretion, review the affairs of the member to evaluate the level of risk of loss the excess member's financial condition may pose to the corporation. The results of the insurance review shall be made available to the commissioner upon request. The costs of the insurance review shall be borne by the credit union at the discretion of the corporation. Upon an insurance review, the corporation may make recommendations to an excess member it deems expedient.
SECTION 5. Section 7 of said chapter 294, as most recently amended by section 4 of chapter 278 of the acts of 1982, is hereby further amended by striking out subsection (d), and inserting in place thereof the following subsection:-
(d) With the approval of the commissioner, the board of directors may pay to regular, excess or inactive members a dividend computed on the aggregate assessments paid by each member pursuant to this chapter.
SECTION 6. Said chapter 294 is hereby further amended by striking out section 9 and inserting in place thereof the following section:-
Section 9. The board of directors of the corporation may by their vote and with the approval of the commissioner borrow money for the purposes of the share insurance fund and may pledge any assets in which such fund is invested as security for such loans. The directors may buy reinsurance and bonds or make purchases of stock or otherwise participate in the capital structure of a corporation for the purposes of protecting and strengthening the share insurance fund and reducing and diversifying the overall risk to the fund or make purchases of stock in a corporation formed for the purpose of providing excess insurance or of reinsuring share insurance corporations. The corporation may evaluate and transfer funds to a regional or national share insurance corporation whose primary function is for the insurance of shares or the reinsurance of share insurance corporations.
SECTION 7. Section 12 of said chapter 294, as amended by section 5 of chapter 306 of the acts of 1973, is hereby further amended by adding the following 2 paragraphs:-
In addition to the foregoing, the corporation may make the following investments:-
(a) in the shares of the Central Credit Union Fund, Incorporated, authorized by section 3 of chapter 216 of the acts of 1932;
(b) in the shares of any federally chartered corporate credit union; but, not more than 25 per cent of the assets of the corporation shall be invested in the shares;
(c) in deposits in savings banks incorporated in the commonwealth;
(d) in paid-up shares and accounts of and in cooperative banks incorporated in the commonwealth;
(e) in the shares of savings and loan associations incorporated in the commonwealth;
(f) in deposits in trust companies incorporated in the commonwealth;
(g) in deposits in banking companies incorporated in the commonwealth which are members of the Federal Deposit Insurance Corporation;
(h) in the shares of federal savings and loan associations having a usual place of business within the commonwealth to an amount not in excess of the insurance provided by the Federal Savings and Loan Insurance Corporation for a depositor in any one of the associations;
(i) in deposits in national banks located in the commonwealth;
(j) in bonds or notes of the United States or of any state or subdivision thereof;
(k) obligations of other federal agencies which appear on the list of legal investments prepared pursuant to section 15A of chapter 167 of the General Laws;
(l) in repurchase agreements secured by government obligations up to 1 year maturity;
(m) in a common trust unit plan organized for the purchase of obligations of the United States or any subdivision thereof which appear on the list of legal investments prepared pursuant to said section 15A of said chapter 167 and which plan has as its custodian a banking institution authorized to accept deposits from a credit union or from a savings bank;
(n) participate in federal funds with those banking corporations which are listed as eligible for such an investment, on the list of legal investments prepared pursuant to said section 15A of said chapter 167;
(o) in any obligations, bank stocks, bank holding company stocks, insurance stocks or preferred stocks of public utility companies which appear on the list of legal investments prepared pursuant to said section 15A of said chapter 167;
(p) in certificates of deposit having a maturity not in excess of 2 years of a banking corporation; provided, however, that (i) either the banking corporation or a bank holding company as, defined by chapter 167A of the General Laws which owns 2/3 of the outstanding shares of each class of the banking corporation's voting stock has paid, in each of the 5 years immediately preceding the date of investment dividends, in cash of not less than 4 per cent of its common stock without having reduced the aggregate par value thereof; (ii) the banking corporation has surplus at least equal to 50 per cent of its capital stock; (iii) the banking corporation has a combined total of capital stock, surplus, undivided profits, capital debentures and reserve for contingencies at least equal to 6 per cent of its aggregate deposit liability at the end of the calendar year immediately preceding the date of investment; and (iv) the banking corporation is, if its principal office is located outside the commonwealth, a member of the federal reserve system; provided, however, that in the case of a banking corporation having a combined total of capital stock, surplus, undivided profits and reserve for contingencies equal to at least $500,000,000, the said combined total may be less than 6 per cent, but not less than 5 per cent, of its aggregate deposit liability at the end of the calendar year immediately preceding the date of investment. The limitations imposed by clause (i) of this paragraph shall not apply to an aggregate investment of not in excess of $100,000 in certificates of deposit of a banking corporation, the deposits of which banking corporation are insured by the Federal Deposit Insurance Corporation;
(q) in banker's acceptances of the kinds and maturities made eligible by law for rediscount with federal reserve banks; if the same are accepted by a bank, banking association or trust company incorporated under the laws of the United States or of this commonwealth, and having its principal place of business within the commonwealth;
(r) in bonds of governments or countries friendly to the United States as defined by the United States Department of State;
(s) in the capital stock of the Federal Home Loan Bank of Boston;
(t) notwithstanding clause (k), the corporation may invest in mortgage backed securities originated by the corporation when the securities are guaranteed by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
For the purposes of clauses (a) to (i), inclusive, of the preceeding paragraph, the words "shares, deposits and accounts" shall include term share, term deposit, certificate of deposit, or term account with a maturity not to exceed 3 years.