AN ACT MODERNIZING THE CREDIT UNION 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. The second paragraph of section 3 of chapter 167A of the General Laws, as appearing in the 2018 Official Edition, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- If the commissioner determines that the reciprocity, age of institution and deposit cap requirements under section 2 have been met, then the other provisions of section 2 shall not apply to the acquisition by a bank holding company or a company or a banking institution that would become a bank holding company; provided, however, that a banking institution or other bank holding company shall be merged, consolidated, its assets purchased or established on an interim basis simultaneously with the acquisition of the shares of the banking institution or other bank holding company; provided further, that the company or bank holding company is not operated by the acquiring bank holding company, company or banking institution as a separate entity other than as the survivor of the merger, consolidation or asset purchase; and provided further, that the transaction is approved by the commissioner.
SECTION 2. Section 5 of chapter 167C of the General Laws, as so appearing, is hereby amended by adding the following sentence:- To determine the investigation fee to establish a branch office, the commissioner of administration may make such classifications and differentiations of banks and may provide adjustments to the fee as are necessary; provided, however, that such classifications and differentiations may be based on: (i) the asset size of the bank; (ii) the number of existing branch offices of the bank; or (iii) other criteria as determined by the commissioner of administration; provided further, that the fee shall be consistent with and equal to the amount of the investigation fee to establish a branch office imposed on credit unions in section 8 of chapter 171.
SECTION 3. Section 16 of chapter 167D of the General Laws, as so appearing, is hereby amended by striking out, in lines 6 to 9, inclusive, the words “no such transfer shall be made if the debt is the result of consumer credit granted under the federal Truth in Lending Act, 15 U.S.C. section 1601 et. seq.” and inserting in place thereof the following words:- if the debt is the result of consumer credit granted under the federal Truth in Lending Act, 15 U.S.C. 1601 et. seq., any required notice shall be made in compliance with federal law and the regulations promulgated thereunder.
SECTION 4. Section 2 of chapter 167H of the General Laws, as so appearing, is hereby amended by adding the following subsection:-
(d) A subsidiary banking institution established pursuant to a reorganization under clause (2) of subsection (a) or clause (2) of subsection (b) shall file a certificate of authority, together with articles of organization with the state secretary.
SECTION 5. Section 7 of said chapter 167H, as so appearing, is hereby amended by inserting after the word “form”, in line 11, the following words:- , an out-of-state bank, as defined in section 1 of chapter 167, in mutual form.
SECTION 6. Section 4 of chapter 167I of the General Laws, as so appearing, is hereby amended by striking out, in line 2, the word “federal” and inserting in place thereof the following word:- federally-chartered.
SECTION 7. Section 11 of chapter 167J of the General Laws, as so appearing, is hereby amended by inserting after the word “to,” in line 6, the following words:- : (i) the close of the last business day of the preceding month or the close of a business day not more than 10 days before the date of the meeting; or (ii).
SECTION 8. Section 6 of chapter 168 of the General Laws, as so appearing, is hereby amended by striking out, in line 25, the words “within 1 year after its date of issue” and inserting in place thereof the following words:- not more than 1 year after its date of issue; provided, however, that the board may grant an additional extension upon a demonstration of good cause; and provided further, that the board may impose terms and conditions on any such extension.
SECTION 9. Section 6 of chapter 170 of the General Laws, as so appearing, is hereby amended by striking out, in lines 24 and 25, the words “within 1 year after its date of issue” and inserting in place thereof the following words:- not more than 1 year after its date of issue; provided, however, that the board may grant an additional extension upon a demonstration of good cause; and provided further, that the board may impose terms and conditions on any such extension.
SECTION 10. Section 1 of chapter 171 of the General Laws, as so appearing, is hereby amended by striking out, in lines 4 and 5, the words “two hundred and sixteen of the acts of nineteen hundred and thirty-two” and inserting in place thereof the following words:- 216 of the acts of 1932.
SECTION 11. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 11, the words “fifty percent” and inserting in place thereof the following words:- 50 per cent.
SECTION 12. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 18 and 19, the words “eighty-two to eighty-four” and inserting in place thereof the following words:- 82 to 84.
SECTION 13. Said section 1 of said chapter 171, as so appearing, is hereby further amended by inserting after the definition of “Interest” the following definition:-
“Low-income credit union”, a credit union whose membership meets the qualifications defined in 12 C.F.R. 701.34 and that has accepted the regulatory designation therein.
SECTION 14. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 33 and 34, the words “two hundred ninety-four of the acts of nineteen hundred and sixty-one” and inserting in place thereof the following words:- 294 of the acts of 1961.
SECTION 15. Said section 1 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 37, the word “eighteen” and inserting in place thereof the following figure:- 18.
SECTION 16. Said section 1 of said chapter 171, as so appearing, is hereby further amended by inserting after the word “partnership”, in line 43, the following words:- , limited partnership, limited liability partnership, limited liability company.
SECTION 17. Section 2 of said chapter 171, as so appearing, is hereby amended by striking out, in line 1, the word “resident” and inserting in place thereof the following words:- the majority of whom reside.
SECTION 18. Said section 2 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 24 and 25, the words “, his residence and the post office address”.
SECTION 19. Section 3 of said chapter 171, as so appearing, is hereby amended by adding the following paragraph:-
Notwithstanding any general or special law to the contrary, a credit union may be organized or designated as a low-income credit union subject to the approval of the commissioner under such procedures, terms and conditions as the commissioner may impose.
SECTION 20. Section 4 of said chapter 171, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following 2 sentences:-
Not less than 7 days before the day appointed for the meeting, a copy of the notice shall be: (i) given to each incorporator; (ii) sent to each incorporator electronically; (iii) left at each incorporator’s residence or usual place of business; or (iv) deposited in the post office, postage prepaid and addressed to each incorporator at the incorporator’s residence or usual place of business. Another copy of the notice and an affidavit of 1 of the signers that the notice has been duly served shall be recorded with the records of the corporation.
SECTION 21. Section 6 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 15 and 16, the words “within one year from the date of its incorporation, otherwise its charter shall be void” and inserting in place thereof the following words:- not more than 1 year after its date of incorporation, otherwise the charter of the credit union shall be void; provided, however, that the commissioner may grant an extension upon a demonstration of good cause and subject to such terms and conditions as the commissioner may impose.
SECTION 22. Section 6A of said chapter 171, as so appearing, is hereby amended by striking out the second paragraph.
SECTION 23. Section 8 of said chapter 171, as so appearing, is hereby amended by adding the following paragraph:-
An investigation fee shall be submitted with any application to establish a branch office. The investigation fee shall be determined annually by the commissioner of administration under section 3B of chapter 7. To determine the amount of the investigation fee to establish a branch office, the commissioner of administration may make such classifications and differentiations of credit unions and may provide adjustments to the fee as necessary; provided, however, that such classifications and differentiations may be based on: (i) the asset size of the credit union; (ii) the number of existing branch offices of the credit union; or (iii) other criteria as determined by the commissioner of administration; and provided further, that the investigation fee shall be consistent with and equal to the amount of the investigation fee to establish a branch office imposed on banks in section 5 of chapter 167C.
SECTION 24. Section 9 of said chapter 171, as so appearing, is hereby amended by inserting after the word “committee,” in line 16, the following words:- , if applicable, as required by the by-laws.
SECTION 25. Said section 9 of said chapter 171, as so appearing, is hereby further amended by inserting after the word “committee”, in line 18, the first time it appears, the following words:- , if applicable, as required by the by-laws.
SECTION 26. Section 10 of said chapter 171, as so appearing, is hereby amended by striking out, in line 8, the words “, or change in location, or change in name”.
SECTION 27. Section 11 of said chapter 171, as so appearing, is hereby amended by striking out the second and third paragraphs and inserting in place thereof the following 2 paragraphs:-
A member shall not have more than 1 vote and, after a credit union has been incorporated for 1 year, a member shall not be entitled to vote or be a candidate for director until the member has been a member for not less than 3 months. An organization member or a person who is a party to a joint account may cast 1 vote on the share or deposit account at any of its meetings by a duly delegated agent or a party to the joint account; provided, however, that a minor shall not have the right to vote. A member may vote: (i) in person; (ii) by mail; or (iii) by electronic means; provided, however, that each credit union shall set forth in its by-laws the method of voting to be used by its members; provided further, that the commissioner may impose conditions or limitations on such voting methods.
The members shall elect directors, vote on any proposed amendment to the by-laws and act on such matters as required under law at each annual meeting.
SECTION 28. The first paragraph of section 12 of said chapter 171, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following 2 sentences:- The business and affairs of a credit union shall be managed by a board of not less than 7 directors. A credit union may limit the number of employees serving as directors in its by-laws.
SECTION 29. Section 13 of said chapter 171, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following 2 paragraphs:-
The board of directors shall have the general direction of the affairs of the corporation and shall meet not less than once each month. A quorum shall consist of not less than a majority of the directors. If less than a quorum is present, a majority of those present may adjourn the meeting until the next regular meeting or another time prior to the next regular meeting. The board of directors shall act upon all applications for membership and determine the rate of interest to be paid on deposits; provided, however, that the board of directors may delegate such duties. The board of directors may declare dividends as provided in section 29 and shall fill vacancies in the board of directors and committees until the next annual election; provided, however, that the board of directors shall not delegate such duties. The board of directors may authorize the establishment or the discontinuance of deposit accounts. The board of directors shall make recommendations to the members of the credit union relative to the need of amendments to the by-laws and other matters upon which the members should act at any regular or special meeting. The board of directors may borrow money for and on behalf of the credit union as authorized by section 73. The board of directors may, by a 2/3 vote, remove from office for cause an officer or a member of a committee. The board of directors may elect an honorary president, who shall be a member of the credit union; provided, however, that an honorary president shall not be compensated in any way by the credit union. The board of directors may appoint associate directors who shall not be compensated or vote.
Unless the articles of organization or by-laws provide that an action required or permitted under this chapter or another provision of the General Laws to be taken by the board of directors shall be taken at a meeting, the action may be taken without a meeting if the action is taken by the unanimous consent of the members of the board of directors. The action shall be evidenced by at least 1 written consent describing the action taken, signed by each director and delivered to the credit union by electronic transmission or sent to the address specified by the credit union for that purpose, or to the principal office of the credit union if no address has been specified, addressed to the secretary or other officer or agent having custody of the records of proceedings of the board of directors and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this section is effective when the last director signs or delivers the consent, unless the consent specifies a different effective date. A consent signed or delivered under this section has the effect of a meeting vote and may be described as such in any document. This section shall also apply to committees of the board of directors and the members thereof.
SECTION 30. Section 14 of said chapter 171, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-
The board of directors may expel from a credit union a member who: (i) has not carried out the member’s engagements with the credit union; (ii) has been convicted of a criminal offense; (iii) neglects or refuses to comply with this chapter or the by-laws of the credit union; (iv) habitually neglects to pay the member’s debts; or (v) has deceived the corporation or any committee thereof with regard to the use of borrowed money; provided, however, that a member shall not be expelled until the member has been provided with reasonable notice in writing of the charges against the member and with an opportunity to be heard; provided further, that a director who becomes insolvent or bankrupt shall be withdrawn from the board of directors automatically, with no requirement for notice or an opportunity to be heard; and provided further, that the board of directors may suspend from the credit union any member who has been convicted of a criminal offense.
SECTION 31. Section 15 of said chapter 171, as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:-
At such meeting, the directors shall elect an auditing committee from among the directors, an investment committee comprised of at least 1 member of the board of directors and a credit committee, if applicable, comprised of at least 1 member of the board of directors. Each such committee shall be comprised of not less than 3 members and not more than 5 members; provided, however, that no member of the board of directors shall be a member of both the credit committee, if any, and the auditing committee.
SECTION 32. Said section 15 of said chapter 171, as so appearing, is hereby further amended by striking out the last paragraph and inserting in place thereof the following paragraph:-
The board of directors may appoint an executive committee or a membership officer from among the board or other employees, other than the treasurer, an assistant treasurer or a loan officer, and authorize the committee or officer to approve applications for membership under such conditions as the board of directors may prescribe.
SECTION 33. The first paragraph of section 16 of said chapter 171, as so appearing, is hereby amended by striking out the second and third sentences and inserting in place thereof the following sentence:- The auditing committee shall: (i) hold meetings not less than once each month; (ii) keep records of the meetings; (iii) certify the monthly statements submitted by the treasurer; (iv) make a thorough annual audit of the books, including income and expenses; (v) report to the board of directors its findings, together with any recommendations; and (vi) make an annual report at the annual meeting.
SECTION 34. The second paragraph of said section 16 said chapter 171, as so appearing, is hereby amended by striking out the third sentence.
SECTION 35. Section 17 of said chapter 171, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-
The credit committee, if any, shall hold meetings not less than once in each month, act on all applications for loans and approve, in writing, all personal loans granted and the security, if any, pledged therefor, except as provided in this section. The credit committee shall submit to the board of directors all applications for loans to be secured by mortgages of real estate with its recommendations thereon. The credit committee may reasonably delegate its duties to employees in accordance with written loan policies that establish appropriate limits and standards and that are consistent with safe and sound banking practices.
SECTION 36. The third paragraph of said section 17 of said chapter 171, as so appearing, is hereby amended by striking out the third sentence.
SECTION 37. Section 18 of said chapter 171, as so appearing, is hereby amended by adding the following paragraph:-
The investment committee shall hold meetings not less than once in each month. The investment committee may reasonably delegate its duties to employees in accordance with written investment policies that establish appropriate limits and standards and that are consistent with safe and sound banking practices.
SECTION 38. Section 19 of said chapter 171, as so appearing, is hereby amended by striking out, in line 10, the following words:- state or.
SECTION 39. Said section 19 of said chapter 171, as so appearing, is hereby further amended by inserting after the word “affiliate,”, in line 12, the following words:- a mortgage company owned by a bank.
SECTION 40. Section 21 of said chapter 171, as so appearing, is hereby amended by striking out, in line 8, the words “such bonds” and inserting in place thereof the following words:- bonds upon which changes are made.
SECTION 41. Said chapter 171 is hereby further amended by striking out section 26, as so appearing, and inserting in place thereof the following section:-
Section 26. Annually, not more than 30 days after the last business day of December, a credit union shall make a report to the commissioner in such form as the commissioner may prescribe accurately showing its condition at the close of business on that day and containing such other information as the commissioner may require. The annual report shall be in accordance with generally accepted accounting principles and shall fairly present the credit union’s condition as of the last business day of the credit union’s fiscal year. A statement of condition of a credit union shall be available for examination for reasonable purposes by members at the principal office of a credit union during business hours or made available to a member upon reasonable request.
SECTION 42. Section 30 of said chapter 171, as so appearing, is hereby amended by inserting after the word “Administration” in line 9, the following words:- and to members of low-income credit unions.
SECTION 43. Said chapter 171 is hereby further amended by striking out section 32A, as so appearing, and inserting in place thereof the following 2 sections:-
Section 32A. Notwithstanding any general or special law to the contrary, a credit union may accept a funeral trust account, as defined in regulations promulgated by the board of registration in embalming and funeral directing.
Section 32B. A natural person not more than 18 years of age or not less than 65 years of age may choose 1 demand deposit account and 1 savings account upon which no service, maintenance or other similar charge shall be imposed; provided, however, that any such demand deposit account and any such savings account shall each include a joint account in which the spouse of the eligible depositor, if applicable and regardless of age, is the joint tenant therein or the joint tenant would otherwise be an eligible depositor and that has been established and used for personal, family or household purposes. Such account shall not be subject to: (i) a minimum balance requirement; (ii) a charge for a deposit or withdrawal; or (iii) a fee for the initial order or subsequent refills of the basic line of checks offered by the credit union, which shall include the name of the depositor. A savings account in trust for another person shall be covered by the notice, services, fee and charge provisions of this section only if the trustee is a person not more than 18 years of age or not less than 65 years of age. To obtain a demand deposit account and a savings account under this section, a consumer shall notify a credit union of the consumer’s eligibility for such accounts and provide proof of age in a form acceptable to the credit union. A credit union may assess a fee against an account under this section for certain services in accordance with the credit union’s published service charge schedule, which shall include stop payment orders, wire transfers, certified or bank checks, money orders, deposit items returned, transactions at electronic branches and through other electronic devices and a reasonable charge, as determined by the commissioner, against any such account when payment on a check or other transaction on the account has been refused because of insufficient funds or paid despite insufficient funds. A credit union shall post in each of its credit union offices a notice informing consumers of the availability of the credit union services under this section and shall disclose annually to all depositors, in a manner of its choosing, the provisions of this section. For the purposes of this section, the term “check or other transaction” shall include, but not be limited to: (i) a check, as defined in 12 U.S.C. 5002; (ii) an electronic fund transfer, as defined in section 1 of chapter 167B; or (iii) a transaction processed by an automated clearinghouse.
SECTION 44. Sections 33 and 34 of said chapter 171 are hereby repealed.
SECTION 45. Section 35 of said chapter 171, as appearing in the 2018 Official Edition, is hereby amended by striking out, in lines 4 to 9, inclusive, the words “; provided, however, that the deposit accounts of any one such person, partnership or corporation shall not, except by the accumulation of interest, be permitted to exceed at any one time, seventy-five thousand dollars or one and one-half percent of the deposits or shares of the credit union, whichever is greater”.
SECTION 46. The third paragraph of section 39 of said chapter 171, as so appearing, is hereby amended by adding the following sentence:- A surviving owner of a joint account may continue credit union membership if the surviving owner is eligible for membership and meets all requirements in the by-laws.
SECTION 47. Section 41 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 2 and 3, the words “in the discretion of the directors”, and inserting in place thereof the following words:- subject to the policy of the credit union.
SECTION 48. Section 42 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 6 and 7, the words “the treasurer or other” and inserting in place thereof the following word:- a.
SECTION 49. Sections 44 and 45 of said chapter 171 are hereby repealed.
SECTION 50. Section 49 of said chapter 171 of the General Laws, as appearing in the 2018 Official Edition, is hereby amended by striking out, in lines 5 and 6, the words “certified mail, return receipt requested” and inserting in place thereof the following words:- first class mail or electronic mail.
SECTION 51. Said section 49 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 7 to 11, inclusive, the words “no such transfer shall be made if such debt is the result of consumer credit granted under the provisions of chapter one hundred and forty D unless the written notice required by section twenty-three of said chapter one hundred and forty D has been given” and inserting in place thereof the following words:- if the debt is the result of consumer credit granted under the federal Truth in Lending Act, 15 U.S.C. 1601 et. seq., any required notice shall be made in compliance with the federal law and the regulations promulgated thereunder.
SECTION 52. Section 50 of said chapter 171, as so appearing, is hereby amended by striking out, in lines 4 and 5, the words “the treasurer” and inserting in place thereof the following words:- a duly authorized officer of the corporation.
SECTION 53. Section 53 of said chapter 171, as so appearing, is hereby amended by striking out the definition of “Account”, and inserting in place thereof the following definition:-
“Account”, a (i) share, share certificate or share draft account of a member of a credit union or a nonmember served by a credit union serving predominantly low-income members, as defined by the board of the credit union, of a type approved by the board of the credit union that evidences money or its equivalent received or held by a credit union in the usual course of business and for which it has given or is obligated to give credit to the account of such member or such nonmember; (ii) share, share certificate or share draft account of a nonmember credit union and a nonmember unit of federal, state or local government and political subdivisions thereof; or (iii) custodial account established for loans sold in whole or in part; provided, however, that for the purposes of insured state credit unions, “share, share certificate or share draft account” shall include, as determined by the board of the credit union, the equivalent of such accounts under state law.
SECTION 54. Sections 54 to 56, inclusive, of said chapter 171 are hereby repealed.
SECTION 55. Section 57 of said chapter 171, as appearing in the 2018 Official Edition, is hereby amended by striking out, in lines 5 to 7, inclusive, the words “and shall state the purpose for which the loan is desired and the security, if any, offered” and inserting in place thereof the following words:- or by electronic means.
SECTION 56. Sections 59 to 62, inclusive, and section 64 of said chapter 171 are hereby repealed.
SECTION 57. Said chapter 171 is hereby further amended by inserting after section 65A the following section:-
Section 65A½. (a) A credit union may make, acquire, buy or sell, in whole or in part, mortgage loans on property located in the commonwealth, Connecticut, Maine, New Hampshire, New York, Rhode Island or Vermont as participation loans with a bank, credit union service organization, federally-chartered or federally-insured credit union or financial institution, insurance company or any state or federal government agency or a subdivision thereof.
(b) For any mortgage loan participation in which the credit union is originating the loan to the borrower, the borrower shall be a member of the credit union and the loan shall be made in accordance with this chapter.
(c) A credit union may enter into a mortgage loan participation on a loan originated by a bank, credit union service organization, federally-chartered or federally-insured credit union or financial institution, insurance company or any state or federal government agency or a subdivision thereof and issued to a borrower; provided, however, that the loan is a type of loan that the participating credit union may make under the participating credit union’s board-approved policies. Section 66 shall not apply to loans under this subsection.
(d) A credit union may service any mortgage loan participation.
SECTION 58. Said chapter 171 is hereby further amended by striking out sections 65E and 66, as appearing in the 2018 Official Edition, and inserting in place thereof the following 2 sections:-
Section 65E. A credit union shall have the following powers and any further incidental or complementary powers that may fairly be implied from those expressly conferred and such as are reasonably necessary to enable the credit union to exercise fully those powers according to common customs and usages:
(i) to discount, buy, invest in, hold, assign, transfer, sell and negotiate promissory notes, drafts, bills of exchange, mortgages, bonds, debentures, bonds or notes secured by mortgages, installment obligations and other evidences of debt;
(ii) to advance money or credits on real estate, on improvements thereto or on personal security, on terms to be agreed upon; and
(iii) to buy, sell or make loans as participation loans with any other federally-insured credit union, bank or insurance company and to service any loans sold by it.
This section shall be applicable to loans and mortgage loans authorized by sections 65A to 65E, inclusive.
Section 66. Prior to making mortgage loans on real estate pursuant to sections 65 to 65E, inclusive, a credit union shall require a person obligated from time to time to make payments under a mortgage, whether as the original borrower or as a subsequent owner of a mortgaged property, to be or become a member of the credit union.
SECTION 59. Section 67 of said chapter 171, as so appearing, is hereby amended by striking out, in line 14, the figure “1961.” and inserting in place thereof the following figure:- 1961;.
SECTION 60. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out clause (o) and inserting in place thereof the following clause:-
(o) in any obligations, bank stocks, bank holding company stocks, insurance stocks or preferred stocks of public utility companies that appear on the list of legal investments prepared pursuant to said section 15A of said chapter 167; provided, however, that: (i) not more than 10 per cent of the assets of a credit union shall be invested in bank stocks, bank holding company stocks, insurance stocks, preferred stocks of public utility companies or in all 4 of such types of stocks appearing on the list and not more than $15,000 or 2 per cent of the assets of a credit union, whichever is greater, shall be invested in the stock of any 1 such bank, bank holding company, insurance company or preferred stock of public utility companies; (ii) not more than 20 per cent of the assets of a credit union shall be invested in railroad obligations appearing on the list and not more than 1.5 per cent of the shares and deposits of any such credit union shall be invested in the obligations of any 1 operating railroad corporation; (iii) not more than 20 per cent of the assets of a credit union shall be invested in the obligations of telephone companies appearing on the list and not more than 4 per cent of the shares and deposits of such credit union shall be invested in the obligations of any 1 such company; (iv) not more than 25 per cent of the assets of a credit union shall be invested in obligations of public utility companies appearing on the list and not more than 4 per cent of the deposits of such credit union shall be invested in the obligations of any 1 such company; and (v) not more than 10 per cent of the assets of a credit union shall be invested in interest bearing obligations authorized for investment under section 15B of said chapter 167 and appearing on the list and not more than ½ of 1 per cent of the shares and deposits of such credit union shall be so invested in the obligations of any one obligor, but the foregoing limitations shall not apply to obligations of telephone companies, of companies engaged primarily in the distribution and sale of electricity or gas, or both, or of railroad companies other than terminal companies;.
SECTION 61. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 86, the word “funds.” and inserting in place thereof the following word:- funds;.
SECTION 62. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in lines 108 and 109, the words “clause (i) of this paragraph” and inserting in place thereof the following word:- subclause (i).
SECTION 63. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out clause (r) and inserting in place thereof the following clause:-
(r) in bankers’ acceptances of the kinds and maturities made eligible by law for rediscount with federal reserve banks; provided, however, that the same are accepted by a bank, banking association or trust company incorporated under state or federal law and having its principal place of business within the commonwealth; provided, however, that not more than 10 per cent of the assets of a credit union shall be invested in such bankers’ acceptances and not more than 5 per cent of the assets of such credit union shall be invested in the acceptances eligible by law for rediscount in federal reserve banks of any 1 accepting bank or trust company; and provided further, that the aggregate amount of bankers' acceptances of any 1 bank, banking association or trust company held by any such credit union shall not exceed 25 per cent of the paid-up capital and surplus of such bank, banking association or trust company;.
SECTION 64. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 139, the word “and”.
SECTION 65. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 140, the word “Boston.” and inserting in place thereof the following words:- Boston; and.
SECTION 66. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 141, the word “paragraph” and inserting in place thereof the following word:- clause.
SECTION 67. Said section 67 of said chapter 171, as so appearing, is hereby further amended by striking out, in line 146, the word “paragraphs” and inserting in place thereof the following word:- clauses.
SECTION 68. Said chapter 171 is hereby further amended by striking out section 73, as so appearing, and inserting in place thereof the following section:-
Section 73. The board of directors may borrow money for and on behalf of the credit union.
The board may, if the credit union has a deposit or share account, borrow money for and on behalf of the credit union from a savings bank, cooperative bank, federal savings and loan association, national bank or trust company, an entity identified by the commissioner or any federally-insured corporate credit union; provided, however, that money borrowed from any such institution shall be in an amount not more than the deposit or share account and shall extend not more than 1 year from the date on which the loan is made.
SECTION 69. The first paragraph of section 74 of said chapter 171, as so appearing, is hereby amended by striking out clauses (c) and (d) and inserting in place thereof the following words:- and (c) where the aggregate amount of sales of loans exceeds 20 per cent of the total loans outstanding, the prior written approval of the commissioner shall be obtained for any amount in excess thereof.
SECTION 70. Said chapter 171 is hereby further amended by striking out section 75, as so appearing, and inserting in place thereof the following section:-
Section 75. (a) A well capitalized or adequately capitalized credit union, as defined in 12 C.F.R. 702.102, may invest, for the convenient transactions of its business, in the aggregate, in any fixed assets in an amount not to exceed 5 per cent of the credit union’s shares and retained earnings without advance regulatory approval. Included in such investments is the purchase, erection or preparation of rental property in a reasonable amount; provided, however, that the rental property is necessary to complete the purchase, erection or preparation; and provided further, that the commissioner may waive these requirements.
(b) A credit union may: (i) invest an amount to be approved by the commissioner, subject to any applicable regulations as the commissioner may deem necessary, in a corporation or association formed for the purpose of furnishing statistical or bookkeeping services or information of the kind generally required by a credit union to such credit union or to other credit unions or banks as hereinafter provided; or (ii) invest its shares or deposits, in participation with any other credit union, bank or national banking association, in such corporation or association; provided, however, that section 2 of chapter 167 shall apply to such corporations or associations. Nothing contained herein shall be construed to preclude a credit union from renting or subscribing for the services of such corporations or associations or any other corporation or association rendering such services.
(c) A credit union may purchase, by itself or with another credit union or bank, group life insurance on the lives of debtors who request such insurance. The premium for such insurance, or the premium on an individual life insurance policy held to cover the indebtedness, may be added to the payments required of those who elect to become insured. If a debtor so insured dies, the insurance proceeds shall be applied to reduce or extinguish the unpaid indebtedness to the extent of such payment. A director, officer or employee of such credit union shall not benefit financially, directly or indirectly, from the sale of such insurance.
(d) A credit union may purchase by itself, or with a group of credit unions or banks, group accident and health insurance covering debtors of such credit union or group of credit unions if the debtors request such insurance. Such insurance shall cover all or part of the indebtedness of such debtors. The premium for such insurance, or the premium on an individual accident and health insurance policy held to cover the indebtedness, may be added to the payments required of any such debtor who elects to become insured. A director, officer or employee of such credit union shall not benefit financially, directly or indirectly, from the sale of such insurance.
(e) A credit union may engage directly in the business of selling, issuing or registering checks, traveler’s checks or money orders and may cash any check or money order whatsoever and may make charges for any of the foregoing.
(f) (1) For the purposes of this subsection, the following terms shall have the following meanings:
“Lessee”, the person in whose name a safe deposit box stands on the books of a credit union;
“Rent”, the amount due to a credit union for the rental or use of a safe deposit box;
“Safe deposit box”, a box or safe in the vault of a credit union.
(2) A credit union may establish and maintain safe deposit vaults and rent safe deposit boxes or storage space therein under conditions prescribed by the commissioner.
(3) A credit union that leases a safe deposit box for rent shall advise the lessee in writing that insurance coverage for the contents of the safe deposit box is not provided by the credit union but that the lessee may, at the lessee’s own expense, insure the contents of the safe deposit box with an insurance company of the lessee’s own selection. The commissioner shall establish the rules and regulations necessary to carry out this subsection.
(4) If the rent for a safe deposit box has not been paid for 1 year after being due, the credit union may mail, postage prepaid, to the lessee at the lessee’s address shown on the credit union’s books, a notice stating that if the rent for the safe deposit box is not paid within 60 days from the date of the notice, the credit union may cause the safe deposit box to be opened and the contents to be disposed of in accordance with this subsection. If the lessee fails to pay the rent for the safe deposit box in full to the date of the notice within 60 days from the date of the notice, all rights of the lessee in the safe deposit box and of access to it shall cease. Any time thereafter, the credit union may, in the presence of an officer of the credit union and of a notary public not in the general employ of the credit union, cause the safe deposit box to be opened and the notary public shall: (i) remove the contents of the safe deposit box; (ii) list the contents; and (iii) seal the contents in a package, marking thereon the name of the lessee and the lessee’s address as shown on the books of the credit union. An affidavit setting forth the facts concerning the entry and listing the contents of the safe deposit box shall be signed by the officer and the notary public and shall be retained by the credit union. The affidavit shall be prima facie evidence of the facts set forth therein in all proceedings at law and equity wherein evidence of such facts would be admissible. The affidavit shall be in substantially the following form:-
COMMONWEALTH OF MASSACHUSETTS
County of ____
We, ___ an authorized official of ___ and ___ a notary public not in the general employ of said credit union, hereby certify that on the ___ day ___ (insert year), we were present and witnessed the forcible opening of Safe No. ___ leased in the name of ___ in the vaults of the ___ office of said credit union; that the contents of said safe were removed, examined, listed and then enclosed in a package and sealed in our presence. We further certify that the following is a true and complete list of all the contents removed from said safe.
(Allow space here for listing of contents.)
___________________________________________________________________
Signature of officer. Title.
___________________________________________________________________
Name of Credit Union
___________________________________________________________________
Signature of notary public not in the general employ of said credit union.
(5) The package containing the contents of any safe deposit box opened as aforesaid shall be retained on special deposit by the credit union subject to payment of rent due for the safe deposit box, all expenses incurred in connection with opening the safe deposit box and charges for the safekeeping of the package. If the package remains unclaimed for 7 years and the amounts due as above provided remain unpaid, the credit union may mail, postage prepaid, to the person to whom, and at the address at which, the notice provided for above was mailed, a notice stating that if such amounts are not be paid within 60 days from the date of such notice, the credit union will turn over the contents, less the rental charge, to the state treasurer as unclaimed and abandoned property, to be held by the state treasurer subject to chapter 200A. The credit union may sell, assign or deliver so much of the contents of the package, at public or private sale, as will enable it to realize such amount as will compensate the credit union for said charges.
SECTION 71. Section 76 of said chapter 171, as so appearing, is hereby amended by striking out, in line 8, the words “, with the approval of the commissioner”.
SECTION 72. Section 78 of said chapter 171, as so appearing, is hereby amended by adding the following paragraph:-
A credit union may consolidate with and into a federally-chartered credit union and a federally-chartered credit union may consolidate with and into a credit union. In any such consolidation, the credit union shall comply with the applicable provisions of this section. A federally-chartered credit union in such a transaction shall comply with applicable federal law.
SECTION 73. Said chapter 171 is hereby further amended by striking out section 79, as so appearing, and inserting in place thereof the following section:-
Section 79. If the commissioner has taken possession of a credit union as provided for in sections 22 to 26, inclusive, of chapter 167 or a credit union is in the possession of the Massachusetts Share Insurance Corporation and it is determined by the commissioner and the insurer that it is in the best interests of the depositors, shareholders and insurer, a merger as provided for in section 78 may be effected without regard to geographical limitations within the commonwealth.
SECTION 74. Said chapter 171 is hereby further amended by striking out sections 82 and 83, as so appearing, and inserting in place thereof the following 2 sections:-
Section 82. (a) For the purposes of this section and sections 83 and 84, the following terms shall, unless the context clearly requires otherwise, have the following meanings:
“Association”, the Credit Union Employees Retirement Association formed pursuant to this section.
“Credit union” or “credit unions”, any or all of: (i) a bank or credit union chartered by the commonwealth; (ii) such bank or credit union that has converted to a federal charter; (iii) a bank or credit union chartered by the federal government, by a state of the United States other than the commonwealth or by the District of Columbia; (iv) the Cooperative Credit Union Association, Inc. and its successors; (v) the Massachusetts Credit Union Share Insurance Corporation; (vi) other banking or credit union institutions as may from time to time be provided for in the by-laws of the association; and (vii) the respective employees of each of the organizations listed in this definition.
“Customer”, any person or business who has established a contractual relationship for banking business purposes with any credit union located in the commonwealth that is a member of the association.
“Directors of a credit union”, the governing body of each member organization of the association.
(b)(1) Credit unions may form the Credit Union Employees Retirement Association to provide retirement or deferred compensation benefit services through plans that are qualified under section 401, section 408 or section 457 of the federal Internal Revenue Code to employees of credit unions that are established under state law and are members of the association and to their customers. Any credit union shall be eligible for membership in the association; provided, however, that a bank that was eligible to be a member of the association before January 1, 2004, shall not be eligible to become a member of the Cooperative Banks Employees Retirement Association or the Savings Banks Employees Retirement Association unless and until the Cooperative Banks Employees Retirement Association or the Savings Banks Employees Retirement Association permits a member to transfer from any or all of the qualified plans provided by said association, assets and liabilities, attributed to the member’s employees, to 1 or more qualified plans not provided by said association.
(2) Eligible employees may contribute a portion of their compensation and a credit union may contribute to the extent determined by its governing body; provided, however, that all such contributions shall not exceed the limits of said section 401, said section 408 or said section 457 of the federal Internal Revenue Code, as applicable.
(3) The funds contributed by participating credit unions and their employees shall be held or used by the trustees of the association for the provision of retirement and deferred compensation benefits, including pre-retirement, post-retirement cost-of-living adjustment, death and disability benefits incident thereto, in all cases subject to the limits of said section 401, said section 408 or said section 457 of the federal Internal Revenue Code, as applicable. Expenses necessary for the administration of the association shall be paid by participating members as provided in the by-laws of the association. The association shall annually provide to each member a report of assets and liabilities attributable to its participants in any or all qualified plans adopted by a member.
(4) A credit union providing retirement benefits to its employees through a plan offered by a provider of plans other than the association shall file with the commissioner such reports as the commissioner may from time-to-time require; provided, however, that such a plan shall be a qualified plan under said section 401, said section 408 or said section 457 of the federal Internal Revenue Code.
Section 83. The by-laws of the association shall be submitted to the commissioner and shall prescribe the manner in which, and the officers and agents by whom, the association may be conducted and the manner in which its funds may be invested and paid out. The association shall be formed when its by-laws have been approved and agreed to by a majority of the directors of each of 15 or more credit unions and have been approved by the commissioner. The association shall provide to the commissioner such statements of the membership and financial transactions of the association as the commissioner may from time-to-time require. The commissioner may verify any such statement by an examination of the books and papers of the association.
The association shall not be subject to chapter 32 or chapter 175 or to such other provisions of law related to insurance companies or other retirement associations.
SECTION 75. Section 84 of said chapter 171, as so appearing, is hereby amended by striking out, in line 2, the words “wages or salary” and inserting in place thereof the following word:- compensation.
SECTION 76. Said section 84 of said chapter 171, as so appearing, is hereby further amended by inserting after the word “insolvency,”, in line 6, the following words:- insurance, retirement systems or pensions.
SECTION 77. Section 6 of chapter 172 of the General Laws, as so appearing, is hereby amended by striking out, in line 24, the words “within 1 year after its date of issue” and inserting in place thereof the following words:- not more than 1 year after its date of issue; provided, however, that the board may grant an additional extension upon a demonstration of good cause; and provided further, that the board may impose terms and conditions on such extension.
Approved, January 12, 2021.