AN ACT ESTABLISHING A RESERVE FUND FOR CREDIT UNIONS.
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 1A of chapter 294 of the acts of 1961, as amended by section 1 of chapter 115 of the acts of 1996, is hereby further amended by adding the following definition:-
“Reserve Fund”, the reserve fund for regular members and excess members authorized by section 8A.
SECTION 2. Said chapter 294 is hereby further amended by inserting after section 8 the following section:-
Section 8A. Deposits of Reserves by Members. The corporation may establish a separate and distinct fund to be known as the Reserve Fund for the purpose of promoting liquidity and elasticity and flexibility of the resources of its members. The fund shall be funded with term and regular deposits voluntarily made by regular members and excess members. No member shall have on deposit more than 10 per cent of its assets in the fund. After the fund attains a total asset basis of $30,000,000, deposits of any 1 member shall not exceed 10 per cent of all deposits in the fund.
The directors of the corporation shall determine the terms and conditions upon which deposits by members may be accepted.
The corporation may, in accordance with its by-laws, loan monies in the fund only to regular members and excess members, and the loan so made shall constitute a debt against the borrowing member and, in the case of its liquidation, shall be satisfied before any distribution of its assets is made to members. A member may not borrow from the fund in excess of 10 per cent of its assets unless the loan is secured as required by the directors of the corporation.
The pledging of any mortgage by a member as security for a loan shall constitute a valid assignment thereof at law and the corporation may effect its collection in the manner provided by law.
The assets of the fund shall be invested only in investments permitted under section 12.
SECTION 3. Section 12 of said chapter 294 is hereby further amended by adding the following clause:-
(u) in obligations, deposits or loans to the Reserve Fund of the corporation authorized by section 8A.
SECTION 4. The first paragraph of section 67 of chapter 171 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking out clause (e) and inserting in place thereof the following clause:-
(e) in deposits in the Reserve Fund of the Massachusetts Credit Union Share Insurance Corporation authorized by section 8A of chapter 294 of the acts of 1961.
Approved, August 6, 2012.