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 17 Notice to Co-operative Central Bank upon proposal to merge or consolidate co-operative bank into a bank or upon conversion to federal charter; effect of acceptance of federal charter; effect of conversion of federal bank or federal thrift into co-operative bank
Section 17. (a) Upon a proposal to merge or consolidate a co-operative bank with and into a bank, other than a co-operative bank, a federally-chartered bank or an out-of-state bank or conversion to a federal charter such co-operative bank shall send a notice in writing by registered mail to the Co-operative Central Bank, hereinafter call the central bank, established by chapter 45 of the acts of 1932, at least 60 days before the meeting of the directors to vote on the merger, consolidation or conversion.
(b) Upon the acceptance by a co-operative bank of a federal charter and after the commissioner has received from the state secretary a certificate that such co-operative bank, hereinafter referred to as the predecessor corporation, has been duly recorded for dissolution, paragraphs 1 to 3, inclusive, shall apply.
(1) The central bank shall pay to said succeeding association from the fund representing deposits of member banks made pursuant to chapter 45 of the acts of 1932, hereinafter called the reserve fund, an amount equal to not more than the aggregate of all deposits made by the predecessor corporation held in said reserve fund on the effective date of the conversion, less all indebtedness of such corporation to the central bank; provided, however, that no part of the income, surplus, undivided profits or other reserves held by the central bank in said reserve fund shall be so paid.
(2) All amounts required to be paid by the predecessor corporation while a member bank to the Share Insurance Fund of the central bank, pursuant to section 1 of chapter 73, including the income, surplus, undivided profits and other reserves of the Share Insurance Fund, shall be retained by the central bank as a charge for insurance of the shares of such corporation while a member of said Share Insurance Fund. Such corporation shall participate in any distributions authorized and made pursuant to section 9 of chapter 73 of the acts of 1934; provided, however, that the aggregate amount of such distributions shall be limited to an amount equal to the amount the corporation would have received had the Share Insurance Fund been liquidated at the time such corporation accepted its federal charter. Thereafter the succeeding bank shall be entitled to receive from the central bank the portions, if any, of such other assessments not so paid or required as shall be determined by the central bank with the approval of the commissioner and such determination shall be final and conclusive upon the central bank, the predecessor corporation and the succeeding bank and all other persons then or thereafter interested; provided, however, that the supreme judicial court shall have jurisdiction to review and to confirm or modify such determination upon the petition of the predecessor corporation or the succeeding bank filed within 10 days after receipt thereby of notice of such determination. The central bank, in its discretion and subject to the approval of the commissioner, may make disposition of such other assessments, at any time after such conversion is completed, by adjustment pursuant to an agreement with the predecessor corporation or the succeeding bank and may pay thereto such amount as may be so agreed upon.
(3) The predecessor corporation or the succeeding bank shall, subject to the last sentence of this paragraph, pay to said Share Insurance Fund or make provision for payment thereto of a sum equal to 3 annual assessments, referred to in section 1 of chapter 73 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 share liabilities and notes payable as shown by its last annual report to the commissioner preceding such conversion or, at its option or at the option of the succeeding associations, 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 bank; provided, however, 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 incurred by the central bank, together with interest thereon, in any manner provided by law for the collection of debts. The predecessor corporation or the succeeding bank 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 bank may be entitled as hereinbefore provided. If, however, by federal law or regulation a federal bank converting therefrom to a co-operative 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.
(c) The commissioner may establish the procedure to be followed by a federal bank or federal thrift converting into a co-operative bank; provided, however, that no such conversion shall become effective unless approved in writing by the commissioner. The commissioner shall not grant such approval until the commissioner has received notice from the Share Insurance Fund of the central bank that arrangements satisfactory to it have been made for such conversion.
If an application for conversion is approved by the commissioner as above provided, such federal bank or federal thrift shall cause to be filed with the state secretary the name, residence and post office address of each of the officers and directors of such federal bank or federal thrift, a copy of its proposed by-laws amended to conform with the requirements of section 7 and such other information as said secretary may require.
After approval of such conversion by the commissioner, and receipt by the commissioner of satisfactory evidence that all federal laws and regulations relative to such conversion have been or will be duly complied with, the commissioner shall cause to be filed with the state secretary a certificate of the commissioner's approval. After receipt of such certificate by the state secretary, if the state secretary finds that the requirements of this section have been satisfactorily complied with, the state secretary shall so certify and upon receipt of a fee, the amount of which shall be determined annually by the secretary of administration and finance under section 3B of chapter 7, the state secretary shall issue to said officers and directors in such form as the state secretary may prescribe, a certificate of incorporation as a co-operative bank.
Simultaneously with the receipt of such certificate, such bank, hereinafter referred to as the succeeding corporation, shall become a member of the central bank and of the Share Insurance Fund. Before such succeeding corporation shall commence business as a co-operative bank, it shall pay into the reserve fund of the central bank, established under chapter 45 of the acts of 1932, an amount equal to the deposit required of a member bank thereof of 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 central bank, 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 said Share Insurance Fund or make provision for payment thereto of such a sum as the directors of the central bank, with the approval of the commissioner, shall determine to be equitable; provided, that the succeeding corporation shall pay to said Share Insurance Fund such proportion of any current 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 the duties and obligations of a co-operative bank and shall conduct its business subject to this chapter and other applicable laws; provided, 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.