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The 191st General Court of the Commonwealth of Massachusetts

AN ACT RELATIVE TO CREDIT UNION BRANCHING

     Whereas,  The deferred operation of this act would tend to defeat its purpose, which is to provide forthwith for the establishment and regulation of credit union branch offices in the commonwealth and certain surrounding states, 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.  Chapter 171 of the General Laws is hereby amended by striking out section 8, as appearing in the 2012 Official Edition, and inserting in place thereof the following 7 sections:- 
         Section 8.  The location of the main office of a credit union may be changed with the written consent of the commissioner. 
         After such notice and hearing as the commissioner may require and with the commissioner’s written permission and under such conditions as the commissioner may approve, a credit union may establish and maintain 1 or more branch offices or depots in the county wherein the main office is located, or on a site within 100 miles from the premises of the main office in a city or town in another county including on a site in the states of Connecticut, Maine, New Hampshire, New York, Rhode Island or Vermont, if in the opinion of the commissioner, the public would benefit by the establishment of additional credit union facilities. The establishment and maintenance of branch offices or depots in any 1 of the foregoing states shall also be established and maintained in accordance with the laws of that state. Any of the usual business transacted by a credit union at its main office may be transacted at a branch office. The business at a depot shall be transacted only on such days as may be designated by the board of directors and shall be limited to the receipt of deposits and the collection of moneys due or payable to the credit union and the business shall be subject to such other conditions, if any, as may be prescribed by the commissioner. Credit unions shall not submit more than 1 out-of-state branch application for the commissioner’s review in any 12-month period.
         With the written consent of the commissioner a branch office or depot may be closed or its location may be changed.
         The offices of any credit union consolidating or merging pursuant to section 78 may be maintained as branch offices of the credit union with the written permission of and under such conditions, if any, as may be approved by the commissioner.
Mobile branch banking may be authorized by the commissioner under conditions the commissioner may approve and subject to regulations the commissioner may establish.
         Section 8A.  For the purposes of this section and sections 8B to 8F, inclusive, the terms “foreign credit union” and “out-of-state federal credit union” shall mean a credit union with its principal place of business in the state of Connecticut, Maine, New Hampshire, New York, Rhode Island or Vermont.
         Any foreign credit union or out-of-state federal credit union doing business similar to any business referred to in section 2, may establish and maintain branch offices or depots in the commonwealth, if the foreign credit union or out-of-state federal credit union is expressly authorized to do so by the laws under which it is organized and operates; provided, however, that the laws of the state in which the credit union has its principal place of business expressly authorize, under conditions not more restrictive than those imposed by this chapter as determined by the commissioner, Massachusetts credit unions to establish and maintain branches and depots therein. Such foreign credit unions and out-of-state federal credit unions shall establish and maintain branches or depots in Massachusetts, in accordance with the same laws which govern such activities by Massachusetts credit unions; provided, however, that the initial branch office other than 1 established pursuant to chapter 167B, or, if more than 1, the branch deemed to be the initial office by such entities, shall be considered the main office in the commonwealth to determine the geographical limitations on the establishment of branch offices.
         The commissioner of banks shall promulgate rules and regulations relative to the administration and enforcement of sections 8A to 8F, inclusive. The rules and regulations shall include procedures for accepting applications from qualifying credit unions for approval to open a branch office.
         Section 8B.  A credit union, federal credit union or out-of-state federal credit union with a branch office in the commonwealth may establish educational credit union training programs, student savings deposit programs and school branch office programs. A credit union, federal credit union or out-of-state federal credit union with a branch office in the commonwealth shall conduct such a program under the terms and conditions as the commissioner may establish. A federal credit union or out-of-state federal credit union with a branch office in the commonwealth shall conduct such a program in compliance with applicable federal laws and regulations.
         Section 8C.  A foreign credit union or out-of-state federal credit union, if such credit union does not operate a branch in the commonwealth, may establish and maintain a new branch in the commonwealth; provided, however, that the credit union submits an application in the manner and form prescribed by the commissioner and the commissioner approves that application; provided further, that the laws of the state in which the credit union has its principal place of business expressly authorize, under conditions not more restrictive than those imposed by this chapter as determined by the commissioner, a Massachusetts credit union to establish and maintain a branch therein. Any such foreign credit union or out-of-state federal credit union shall operate under the supervision of the commissioner and in accordance with all applicable laws governing Massachusetts credit unions, including all rules and regulations promulgated thereunder.
         An out-of-state federal credit union shall operate the same as a federal branch which shall be subject to all laws of the commonwealth relative to community reinvestment, consumer protection, fair lending, establishment of intra-state branches, including but not limited to, sections 1 to 14A, inclusive, of chapter 93, and the applicable sections of chapters 93A, 167, 167B, 171, 183 and 184, including all rules and regulations promulgated thereunder and to such other laws of the commonwealth as are applicable to a federal credit union with its main office in the commonwealth.
         Section 8D.  The commissioner shall, in the manner prescribed in section 2 of chapter 167, examine any foreign credit union or out-of-state federal credit union that operates a branch in the commonwealth and shall inspect and examine the affairs of such a credit union, to the extent of its operations in the commonwealth, to ascertain its financial condition and whether it has complied with all applicable laws. The lawful charges incurred by reason of the examination shall be paid by the credit union examined. The commissioner shall preserve a full record of each such examination. Records and information contained in the report of any examination, other than information required by law to be published or to be open to the inspection of the public, shall be open only to the inspection of the commissioner, the commissioner’s examiners and assistants and other officers of the commonwealth as may have occasion and authority to inspect the records in the performance of their official duties. Nothing in this section shall be construed to prohibit the required production of such records and information contained in examination reports before a court of this commonwealth or a master or auditor appointed by the court in a criminal or civil proceeding therein pending, affecting the branch in the commonwealth or out-of-state branch, its officers, directors or employees.
         Copies of reports of such examinations shall be furnished to the parent credit union of the branch examined for its use only and shall not be exhibited to any other person, organization or agency without the prior written approval of the commissioner. The commissioner may, in the commissioner’s discretion, furnish to any credit union regulatory agency or law enforcement agency or the banking departments of other states such information, reports and statements relating to the institutions under the commissioner’s supervision as the commissioner deems appropriate.
         The commissioner, in making the examination, shall have free access to the vaults, books and papers of foreign credit union or out-of-state federal credit union and may summon the directors, officers or agents thereof, and such other witnesses as deemed necessary for examination relative to the affairs, transactions and condition of such credit unions, and for that purpose is empowered to administer oaths.
         Notwithstanding anything in this section to the contrary, the commissioner may enter into cooperative agreements with credit union regulators in jurisdictions other than the commonwealth to facilitate the regulatory supervision of branches in the commonwealth and out-of-state branches including agreements relative to the coordination of examinations or joint participation in examinations of the branches and may accept reports of examinations by the regulators pursuant to such agreements. The commissioner may also enter into such agreements providing for enforcement actions against branches in the commonwealth and out-of-state branches. Any such agreement may include provisions relative to the amount and assessment of fees for an examination or enforcement actions. Nothing in this section shall be construed as limiting in any way the authority of the commissioner to independently conduct examinations of and enforcement actions against any branch in the commonwealth or out-of-state branch.
         Section 8E.  Each foreign credit union or out-of-state federal credit union that operates a branch in the commonwealth shall register with the commissioner on forms prescribed by the commissioner which shall include information regarding the financial condition, operations and management of the credit union and other related matters the commissioner may deem necessary or appropriate to carry out this chapter.
         The commissioner, from time to time, may require reports under oath to keep informed as to whether this chapter and the rules and regulations established thereunder have been complied with.
         Section 8F.  If, upon examination, it appears that a foreign credit union or out-of-state federal credit union is insolvent, or that its capital is impaired, or that its condition is such as to render the continuance of business hazardous to the public or to those having funds in its custody, the commissioner shall apply, or if any such credit union appears to have exceeded its powers or failed to comply with applicable law may apply, to the supreme judicial court, which shall have jurisdiction in equity on such application, to issue an injunction restraining the credit union, in whole or in part, from further proceeding with its business, and to make further orders or decrees as justice and equity may require. The court may appoint 1 or more receivers to take possession of its property and effects, subject to such directions as may from time to time be prescribed by the court.
         SECTION 2.  Notwithstanding any general or special law to the contrary, the commissioner of banks shall promulgate rules and regulations relative to the administration and enforcement of this act not later than July 1, 2015. The rules and regulations shall include procedures for accepting applications from qualifying credit unions for approval to open a branch office. Upon promulgation of the rules and regulations required in this act, the commissioner of banks shall accept, from credit unions qualified pursuant to chapter 171 of the General Laws, applications for approval to open a branch office pursuant to section 1.
         SECTION 3.  Section 1 shall take effect on October 1, 2015.
         SECTION 4.  Section 2 shall take effect upon its passage.

Approved, January 7, 2015.