2017 Massachusetts General Laws
PART I ADMINISTRATION OF THE GOVERNMENT
TITLE XXII CORPORATIONS
Chapter 167I CORPORATE BANK TRANSACTIONS: MERGERS, CONSOLIDATIONS, PURCHASE OF ASSETS AND CONVERSIONS
Section 16 Termination of membership of savings bank in Depositors Insurance Fund upon merger or consolidation into bank, federally chartered bank or out-of-state bank or upon acceptance of federal charter; effect of acceptance of federal charter; effect of conversion of federally-chartered bank into savings bank

Universal Citation: MA Gen L ch 167I § 16 (2017)

Section 16. (a) Upon a merger or a consolidation by a savings bank with and into a bank, a federally-chartered bank or an out-of-state bank, other than a savings bank, such savings bank, in this section referred to as a former member bank, shall cease to be a member bank in the Depositors Insurance Fund. Notwithstanding any general or special law to the contrary, upon any such merger or consolidation, such savings bank shall not succeed to or acquire any rights including, but not limited to, rights to dividends or to the proceeds of any distribution in complete or partial dissolution or liquidation, in the Depositors Insurance Fund or in its Liquidity Fund or Deposit Insurance Fund.

A savings bank shall send a notice in writing by registered mail to the Depositors Insurance Fund at least 60 days before the meeting of the corporators or stockholders, as applicable, to vote on the merger or consolidation with and into a bank, a federally-chartered bank or an out-of-state bank, other than a savings bank.

(b) Upon the acceptance by a savings bank of a federal charter it shall cease to be a member bank in the Depositors Insurance Fund. Notwithstanding any general or special law to the contrary, following its acceptance of a federal charter such corporation shall not retain, succeed to or acquire any rights including, but not limited to, rights to dividends or to the proceeds of any distribution in complete or partial dissolution or liquidation, in the Depositors Insurance Fund or in its Liquidity Fund or Deposit Insurance Fund, except to the extent specifically provided in this paragraph. In the event that such corporation shall, subsequent to its acceptance of a federal charter, (i) convert to a Massachusetts-chartered savings bank and become a member of the Depositors Insurance Fund or (ii) become a federal member of the Depositors Insurance Fund, such corporation shall, for so long as it shall remain a member or federal member bank of the Depositors Insurance Fund, participate in any dividends paid pursuant to section 3 of chapter 43 of the acts of 1934 and in any distributions made pursuant to section 10 of said chapter 43, and in any dividends paid and any withdrawals or returns of deposits authorized pursuant to section 4 of chapter 44 of the acts of 1932, in each case based upon the retained amounts paid in by such corporation to the Deposit Insurance Fund and the Liquidity Fund, respectively, without regard to whether such amounts were paid before or after acceptance of a federal charter, or upon the unexpended portion thereof, in the same manner and to the same extent as it would have been entitled to participate if such corporation had not accepted a federal charter.

Upon the conversion of any such corporation into a federal charter, the corporate existence of such bank shall not terminate, provided, however, that such federally-chartered bank shall be deemed to be a continuation of the entity of the savings bank so converted and all property of the converted savings bank, including its rights, titles and interests in and to all property, whether real, personal or mixed, and things in action and every right, privilege, interest and asset of any conceivable value or benefit then existing, or pertaining to it or which would inure to it, shall immediately, by act of law and without any conveyance or transfer and without any further act or deed, remain and be vested in and continue and be the property of such federally-chartered bank into which the savings bank has converted itself and such federal bank shall have, hold and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the converting savings bank, and such federal bank as of the time of the taking effect of such conversion shall continue to have and succeed to all the rights, obligations and relations of the converting savings bank. All pending actions and other judicial proceedings to which the converting savings bank is a party shall not be deemed to have been abated or to have been discontinued by reason of such conversion, but may be prosecuted to final judgment, order or decree in the same manner as if such conversion into such federal bank had not been made and such federal bank resulting from such conversion may continue such action in its corporate name as a federal bank, and any judgment, order or decree may be rendered for or against it, which might have been rendered for or against the converting savings bank theretofore involved in such judicial proceedings.

The predecessor corporation or the succeeding association shall pay to said Deposit Insurance Fund or make provision for payment thereto of a sum equal to 3 annual assessments, at the percentage rate in effect at the time the predecessor corporation ceased to be a member bank and computed on the basis of its deposits as shown by its last annual report to the commissioner preceding such conversion or, at its option or at the option of the succeeding association, as shown by the records of the predecessor corporation on the effective date of conversion. Until such sum shall have been paid in full, payments on account thereof shall be made annually or more often by the predecessor corporation or the succeeding association; provided, that not less than 1/3 of such sum shall be paid annually. If any such 1/3 shall not be so paid or if, at the end of 3 years from the time the predecessor corporation ceased to be a member bank such sum shall not have been paid in full, the entire balance thereof may be recovered by the Fund, together with interest thereon, in any manner provided by law for the collection of debts. The predecessor corporation or the succeeding association may authorize the deduction of such sum in whole or in part, from the amount, if any, of the portions of said other assessments to which the succeeding association may be entitled as hereinbefore provided. If, however, by federal law or regulation, a federal bank converting to a savings bank, is required to pay to the Federal Deposit Insurance Corporation a sum equal to annual premiums or assessments for other than a period of 3 years, then the number of annual assessments payable to said share insurance fund under this section shall be for the same number of years as is so required.

Any such corporation which accepts or has accepted a federal charter after January 1, 1983 may apply to the Depositors Insurance Fund for insurance coverage of its deposits in excess of the amount insured by a federal deposit insurance agency, hereinafter referred to as ''excess insurance'', in accordance with the requirements of chapter 44 of the acts of 1932 and chapter 43 of the acts of 1934; provided, however, that no such corporation shall apply for such excess insurance unless such corporation shall have capital and surplus if a stock institution or surplus if a mutual institution, less any intangible asset value, equal to or greater than 6 per cent of total assets. The Depositors Insurance Fund shall not accept for excess insurance coverage any such corporation which fails to meet the requirements specified above or the requirements set forth in section 19 of said chapter 43. For purposes of this section, ''federal deposit insurance agency'' shall mean Federal Deposit Insurance Corporation or any successor to such corporation.

The commissioner may establish the procedure to be followed by a federally-chartered bank converting into a savings bank; provided, however, that no such conversion shall become effective unless approved in writing by the commissioner; and provided, further, that the commissioner shall not grant such approval until the commissioner has received notice from the Depositors Insurance Fund that arrangements satisfactory to it have been made for such conversion.

(c) Upon the conversion of a federally-chartered bank authorized to conduct business in the commonwealth the corporate existence of such association or bank shall not terminate, provided, however, that the state-chartered savings bank shall be deemed to be a continuation of the entity of the association or bank so converted and all property of the converted association or bank including its rights, titles and interests in and to all property of whatsoever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, or pertaining to it, or which would inure to it, shall immediately by act of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue and be the property of such savings bank into which the federal bank has converted itself, and such savings bank shall have, hold and enjoy the same in its own right as fully and to the extent as the same was possessed, held and enjoyed by the converting association or bank and such savings bank as of the time of the taking effect of such conversion shall continue to have and succeed to all the rights, obligations and relations of the converting association or bank. All pending actions and other judicial proceedings to which the converting federal bank is a party shall not be deemed to have been abated or to have been discontinued by reasons of such conversion, but may be prosecuted to final judgment, order or decree in the same manner as if such conversion into such savings bank had not been made and such savings bank resulting from such conversion may continue such action in its corporate name as a savings bank, and any judgment, order or decree may be rendered for or against it, which might have been rendered for or against such converting federal association or bank theretofore involved in such judicial proceedings.

Upon the completion of the conversion of a federal bank into a savings bank pursuant to this chapter, the savings bank shall become a member of the Depositors Insurance Fund, hereinafter called the fund, and of the Deposit Insurance Fund thereof. Before such succeeding corporation shall commence business as a savings bank, it shall pay into the Liquidity Fund of the fund, an amount equal to the deposit required of a member bank thereof a similar size, as of the date of said certificate, plus such additional amount based upon the surplus of said reserve fund, as the directors of the fund, with the approval of the commissioner, shall determine to be equitable. In addition to the payment to said reserve fund, the succeeding corporation shall pay to the Deposit Insurance Fund such proportion of the current and annual assessment as shall have accrued to the date of said certificate.

After compliance with the foregoing requirements, the succeeding corporation shall be entitled to exercise all of the rights and privileges and shall be subject to all of its duties and obligations of a savings bank and shall conduct its business subject to this chapter and other applicable laws; provided, however, that, with the approval of the commissioner, the succeeding corporation shall have reasonable time after the effective date of the conversion within which to comply with any particular laws not hereinbefore specifically provided for and which it shall be unable to comply with on or before said date.

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