MUTUAL HOLDING COMPANIES

M.G.L. pt. Part I, tit. Title XXII, ch. c. 167H

in effect

M.G.L. c. 167H, § 1 Definitions

c. 167H, § 1. Definitions Section 1. As used in this chapter the following words, unless the context otherwise requires, shall have the following meanings:— ''Commissioner'', the commissioner of banks. ''Interim bank'', a Massachusetts or federal bank, out-of-state bank or out-of-state federal bank organized solely to participate in and facilitate an acquisition, reorganization or other corporate transaction. A Massachusetts bank which is an interim bank shall be organized under chapter 167I. ''Mutual banking institution'', a Massachusetts savings or cooperative bank operating in mutual form. ''Mutual holding company'', a mutual banking institution reorganized in accordance with this chapter to hold all or part of the shares of capital stock of a subsidiary banking institution. ''Securities'', (a) stock of any kind including without limitation preferred or common stock, (b) securities convertible into or exchangeable for stock of any kind, and (c) warrants, options or other rights for the issuance of stock of any kind or of securities convertible into or exchangeable for stock of any kind. ''Subsidiary banking institution'', the banking institution resulting from the reorganization of a mutual banking institution in accordance with section three, all or part of the capital stock of which is held by a mutual holding company.

M.G.L. c. 167H, § 2 Reorganization of mutual banking institution

c. 167H, § 2. Reorganization of mutual banking institution Section 2. (a) Notwithstanding any general or special law to the contrary, a mutual banking institution that is a savings bank may reorganize so as to become a mutual holding company by: (1) establishing a subsidiary banking institution as a stock savings bank in accordance with section 3 and transferring to such subsidiary banking institution the substantial part of its assets and liabilities, including all of its deposit liabilities; or (2) by structuring the reorganization under any procedures acceptable to the commissioner, including, but not limited to, the merger of the existing mutual bank with and into a savings bank established for the purpose of completing the reorganization; provided, that to facilitate a multi-step reorganization the commissioner may, subject to such terms and conditions as the commissioner may impose, grant any and all certificates and approvals to establish and control a new mutual savings bank. Upon such reorganization, all persons who prior thereto held depository rights with respect to or other rights as creditors of such mutual banking institution shall have such rights solely with respect to the subsidiary banking institution and the corresponding liability or obligation of the mutual banking institution to such persons shall be assumed by the subsidiary banking institution. All persons who had liquidation rights pursuant to section 15 of chapter 167I with respect to the mutual banking institution shall continue to have such rights solely with respect to said mutual holding company. (b) Notwithstanding any general or special law to the contrary, a mutual banking institution that is a cooperative bank may reorganize so as to become a mutual holding company by: (1) establishing a subsidiary banking institution as a stock cooperative bank in accordance with section 3 and transferring to such subsidiary banking institution the substantial part of its assets and liabilities, including all of its deposit liabilities; or (2) by structuring the reorganization under any procedures acceptable to the commissioner, including, but not limited to, the merger of the existing mutual bank with and into a cooperative bank established for the purpose of completing the reorganization; provided, that for the purpose of facilitating a multi-step reorganization the commissioner may, subject to such terms and conditions as the commissioner may impose, grant any and all certificates and approvals to establish and control a new cooperative bank. Upon such reorganization, all persons who prior thereto held depository rights with respect to or other rights as creditors of such mutual banking institution shall have such rights solely with respect to the subsidiary banking institution and the corresponding liability or obligation of the mutual banking institution to such persons shall be assumed by the subsidiary banking institution. All persons who had liquidation rights pursuant to section 15 of chapter 167I with respect to the mutual banking institution shall continue to have such rights solely with respect to said mutual holding company. (c) Any reorganization of a mutual banking institution pursuant to subsection (a) shall be approved by a majority of the board of trustees and by a majority of the corporators present and voting in each case at the annual meeting or at a special meeting called, in accordance with the by-laws, for such purpose. Any such reorganization pursuant to subsection (b) shall be approved by a majority of the board of directors and by a majority of the shareholders present and voting in each case at the annual meeting or at a special meeting called, in accordance with the by-laws, for such purpose. (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.

M.G.L. c. 167H, § 3 Notice of proposed reorganization to commissioner; factors to be considered

c. 167H, § 3. Notice of proposed reorganization to commissioner; factors to be considered Section 3. A mutual banking institution proposing to reorganize as a mutual holding company pursuant to this chapter shall provide the commissioner with sixty days prior written notice of such proposed reorganization. The notice shall include a copy of the plan of reorganization and shall contain such other information as the commissioner may require. Unless the commissioner approves the formation of the proposed mutual holding company by a written notice issued to the mutual banking institution proposing to reorganize, within sixty days after receipt of notice of the proposed reorganization or, extends for another thirty days the period during which such approval may be issued, such mutual banking institution shall not proceed with such proposed reorganization. If the commissioner so extends the period within which such approval may be issued but within such extended period does not approve, the mutual banking institution shall not proceed with such proposed reorganization. In order to determine whether to approve the formation of a mutual holding company in accordance with the proposed reorganization plan, the commissioner shall consider the following factors: (1) whether the formation of the proposed mutual holding company will be unfair or prejudicial to the depositors of the mutual banking institution proposing to reorganize as a mutual holding company; (2) whether the interest of the public will be served by the formation of the proposed mutual holding company; (3) whether disapproval is necessary to prevent unsafe or unsound banking practices; (4) the financial and management resources of the mutual banking institution proposing to reorganize; and (5) the competence, character and banking experience of the applicant, including its record of compliance with applicable laws and regulations. In connection with a reorganization in accordance with this section, a mutual banking institution may, subject to the approval of the commissioner, retain assets at the mutual holding company level to the extent that such assets are not then required to be transferred to the subsidiary banking institution in order to satisfy capital or reserve requirements of any applicable state or federal law.

M.G.L. c. 167H, § 4 Board of corporators; members; term; election

c. 167H, § 4. Board of corporators; members; term; election Section 4. (a) A mutual holding company shall be governed by a board of corporators and shall further be governed in accordance with the charter and by-laws of the mutual holding company as adopted or amended in connection with the reorganization authorized under subsection (a) of section two or as amended by the corporators thereafter. Such board of corporators shall have at least twenty-five members and may, at a legal meeting thereof, elect by ballot any person to be a corporator. Corporators shall be elected for a term of ten years; provided, however, that no person shall serve as a corporator of more than one mutual holding company. Not more than three-fifths of the corporators of a mutual holding company shall be trustees or officers thereof at any one time. (b) With respect to a mutual holding company formed through the reorganization of a savings bank, the board of corporators shall initially consist of the board of corporators of such savings bank as constituted pursuant to section nine of chapter one hundred and sixty-eight. Such corporators shall, after the formation of the mutual holding company, continue to serve as corporators for the balance of the terms to which they were elected under said section nine. (c) With respect to a mutual holding company which has been formed through the reorganization of a cooperative bank, the board of corporators shall be elected by a majority of the shareholders of such cooperative bank at the meeting at which the plan of reorganization is approved. Such election shall be in accordance with the provisions of subsection (b) of section two which are applicable to such approval of the plan of reorganization.

M.G.L. c. 167H, § 5 Application for proposed formation of subsidiary banking institution; factors to be considered; issuance of charter

c. 167H, § 5. Application for proposed formation of subsidiary banking institution; factors to be considered; issuance of charter Section 5. The mutual banking institution proposing to form a subsidiary banking institution shall submit an application therefor to the board of banking incorporation, together with such fee as determined by the commissioner of administration annually in accordance with the provisions of section three B of chapter seven, containing such information as the board may require including articles of organization stating (i) the name of the subsidiary banking institution, (ii) the address of the principal office of the same, (iii) the amount, authorized number and par value of the shares of its capital stock, (iv) the minimum amount of capital and surplus with which the subsidiary banking institution shall commence business, which amount may be less than its authorized capital but shall not be less than that required by section three, and (v) the name and address of each prospective initial director of the said subsidiary banking institution. The board, before approving such application and articles of organization and issuing a charter, shall consider whether (1) the formation of the said subsidiary banking institution would be unfair or prejudicial to the depositors of the mutual banking institution proposing to reorganize as a mutual holding company, (2) the interest of the public will be served by the formation of the subsidiary banking institution, (3) the formation of such subsidiary banking institution is in accordance with safe and sound banking practices, and (4) the financial and management resources of the mutual banking institution proposing to reorganize as a mutual holding company warrant approval of such proposal. If the board approves such application and articles of organization, it shall issue a charter and two copies of a certificate of authority to such subsidiary banking institution to commence the business of a stock savings bank or a stock cooperative bank, as the case may be. Such subsidiary banking institution shall file one copy of the certificate of authority, together with a copy of the articles of organization, with the secretary of state. No subsidiary banking institution shall commence business until its insurable accounts or deposits are insured by the appropriate deposit insurer and until a certificate of authority has been issued and filed with the secretary of state; provided, however, that the acceptance of subscriptions for such deposits as may be necessary to obtain the required insurance shall not be considered to be commencing business.

M.G.L. c. 167H, § 6 Rights, powers and privileges of reorganized mutual banking institution; corporate governance procedures

c. 167H, § 6. Rights, powers and privileges of reorganized mutual banking institution; corporate governance procedures Section 6. Upon the reorganization of a mutual banking institution into a mutual holding company, the mutual holding company shall (i) continue to possess and exercise all the rights, powers and privileges, except deposit-taking powers, of a mutual banking institution and (ii) shall be subject to the limitations and restrictions imposed on bank holding companies by chapter 167A and by applicable federal law and regulations. To the extent not inconsistent with the above, a mutual holding company may elect to follow the corporate governance procedures of the General Laws and shall designate in its by-laws the body of law selected for its corporate governance procedures.

M.G.L. c. 167H, § 7 Mutual holding company; powers and duties

c. 167H, § 7. Mutual holding company; powers and duties Section 7. A mutual holding company organized under this chapter may: (1) invest in the stock of 1 or more banking institutions, as defined in section 1 of chapter 167A, or a limited purpose trust company, as defined in section 1 of chapter 167I, which conducts trust and fiduciary business but does not take deposits or otherwise carry on a banking business; (2) acquire a mutual banking institution, a credit union, as defined in section 1 of chapter 171, a federal credit union, as defined in section 1 of chapter 171, a federal bank, as defined in section 1 of chapter 167, in mutual form, an out-of-state bank, as defined in section 1 of chapter 167, in mutual form and an out-of-state federal bank, as defined in section 1 of chapter 167, in mutual form through consolidation or merger of such institution with its subsidiary banking institution; (3) merge with or acquire another state or federal mutual holding company or merge with and into or be acquired by another state or federal mutual holding company; provided, that any such mutual holding company shall have as 1 of its subsidiaries a subsidiary banking institution or a federally-chartered or state-chartered bank, which was in mutual form until it reorganized into a mutual holding company under federal law or the law of another state; (4) merge with or acquire a bank holding company, as defined in section 1 of chapter 167A, or a company in stock form controlling 1 bank that was organized or converted to stock form; provided that the mutual holding company is the continuing entity; (5) invest in a corporation, the purchase of the capital stock of which is permitted for a banking institution under state law; (6) exercise any other power or engage in any activity permitted to a mutual banking institution chartered by the commonwealth; (7) engage directly or indirectly only in such activities as are now or may hereafter be proper activities for bank holding companies under chapter 167A or by applicable federal law or regulations; and (8) exercise any rights, waive any rights or take or waive any other action with respect to any securities of any subsidiary banking institution which are held by such mutual holding company.

M.G.L. c. 167H, § 8 Registration with commissioner; requisite information

c. 167H, § 8. Registration with commissioner; requisite information Section 8. Each mutual holding company shall register with the commissioner on forms prescribed by him which shall include such information with respect to the financial condition, operations, management and intercompany relationships of the mutual holding company and its affiliates and related matters as he may deem necessary or appropriate to carry out the purposes of this chapter. The commissioner may, in his discretion, extend the time within which a mutual holding company shall register and file the requisite information. The commissioner, from time to time, may require reports under oath to keep him informed as to whether the provisions of this chapter and any regulations established thereunder have been complied with, and he may make examinations of each mutual holding company and each affiliate thereof, the cost of which shall be assessed against and paid by such mutual holding company. The commissioner may establish such rules and regulations as he deems necessary to carry out the purposes of this chapter.

M.G.L. c. 167H, § 9 Conversion to stock holding company

c. 167H, § 9. Conversion to stock holding company Section 9. With the approval of the commissioner and subject to such regulations as he may prescribe, a mutual holding company established pursuant to this chapter may convert to a stock holding company.

M.G.L. c. 167H, § 10 Acquisition or merger with another holding company

c. 167H, § 10. Acquisition or merger with another holding company Section 10. If a mutual holding company acquires or merges with another holding company under the provisions of clause (3) of section seven, the holding company acquired or the holding company resulting from such merger or acquisition may only invest in assets and engage in activities which are authorized under section seven. Not later than two years following any such merger or acquisition, the acquired holding company or the holding company resulting from such merger or acquisition shall (i) dispose of any asset which is an asset in which a mutual holding company may not invest under section seven, and (ii) cease any activity which is an activity in which a mutual holding company may not engage under said section seven.

M.G.L. c. 167H, § 11 Subsidiary banking institution; issuance of securities to general public

c. 167H, § 11. Subsidiary banking institution; issuance of securities to general public Section 11. In addition to its powers under the banking laws, any subsidiary banking institution shall, with the prior approval of the commissioner and subject to such regulations as he may prescribe, have the right to issue any securities as defined in section one and to take or waive any action in connection with any such issuance or otherwise with respect to any such securities; provided, however, that in no event shall the mutual holding company hold less than fifty-one percent of the combined voting power of all classes of securities of the subsidiary banking institution that have voting power in the election of directors of such subsidiary banking institution, and each time securities of the subsidiary banking institution are offered to the general public for a price payable in cash to the subsidiary banking institution, eligible account holders, as defined in the regulations prescribed by the commissioner, shall receive, without payment, nontransferable subscription rights to purchase such securities for the same price in the manner and to the extent set forth in such regulations. For purposes of this chapter an offer to the general public shall mean an offer to investors generally. It shall not include an offering in connection with an employee stock option or other employee benefit plan, an offering to the holders of convertible or other securities of the subsidiary banking institution, an offering in connection with a merger, acquisition or reorganization or any other similar limited offering. From and after the time that securities of the subsidiary banking institution have been sold to the general public, there shall be at least two directors of the subsidiary banking institution who are independent and do not serve as an officer, director or employee of, and or not otherwise affiliated with, the mutual holding company or any other subsidiary or affiliate of the mutual holding company.

M.G.L. c. 167H, § 12 Conversion of mutual holding company to a mutual banking institution

c. 167H, § 12. Conversion of mutual holding company to a mutual banking institution Section 12. A mutual company directly or indirectly controlling or owning 1 or more wholly owned stock bank subsidiaries or stock holding companies may elect to convert from a mutual holding company to a mutual banking institution organized under the original charter of its subsidiary banking institution, subject to approval of the commissioner and subject to the following conditions: (1) the conversion of the mutual holding company to a mutual banking institution shall be effected pursuant to a plan of conversion approved by the commissioner and a vote of 2/3 of the corporators of the mutual holding company; (2) all direct or indirect wholly owned stock bank subsidiaries and stock holding companies of the mutual holding company shall be merged into the resulting mutual banking institution; (3) the reorganized mutual banking institution shall assume all assets and liabilities of any direct or indirect wholly owned stock bank subsidiary or stock holding company and shall retain deposit insurance from the Federal Deposit Insurance Corporation and the excess deposit insurer of its subsidiary banking institution; and (4) such other provisions as the commissioner may require. The commissioner may promulgate rules and regulations to carry out this section.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter167HFetched: 10/20/2026