CO–OPERATIVE BANKS

M.G.L. pt. Part I, tit. Title XXII, ch. c. 170

in effect

M.G.L. c. 170, § 1 Definitions

c. 170, § 1. Definitions Section 1. (a) As used in sections 1 to 9, inclusive, the words ''board'' or ''board of bank incorporation'' shall, unless the context clearly requires otherwise, mean a board consisting of the commissioner of banks, the commissioner of revenue and the state treasurer. (b) As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Capital stock'', the sum of the par value of the preferred and common shares of capital stock, issued and outstanding. ''Commissioner'', the commissioner of banks. ''Corporation'' or ''bank'', a co-operative bank incorporated as such in this commonwealth. ''Incorporators'', subscribers to the agreement of association for the purpose of forming a co-operative bank under this chapter. ''Mutual bank'', a co-operative bank incorporated as such in the commonwealth in mutual form. ''Shareholder'' or ''member'', a depositor or holder of any shares or accounts referred to in chapter 167D. ''Shareholders' meeting'' or ''meeting of shareholders'', any annual or special meeting of members of the corporation entitled to vote. ''Stock bank'', a co-operative bank incorporated as such in the commonwealth in stock form which has been chartered or reorganized or converted to a stockholder form of corporation. ''Surplus account'', an account so designated on the books of a stock co-operative bank and consisting of such amounts as shall be required by law or shall be transferred thereto by vote of the board of directors.

M.G.L. c. 170, § 1A Repealed, 2014, 482, Sec. 55

M.G.L. c. 170, § 2 Powers

c. 170, § 2. Powers Section 2. A co-operative bank shall have all the powers expressly granted by law and whatever further incidental powers may fairly be implied from those expressly conferred and such as are reasonably necessary to enable it to exercise fully those powers according to common or accepted banking customs and usages.

M.G.L. c. 170, § 3 Change of corporate name

c. 170, § 3. Change of corporate name Section 3. A corporation formed pursuant to section 2 may authorize, at a meeting duly called for the purpose, by vote of 2/3 of the shareholders present and voting a change of its corporate name. Within 60 days after any meeting at which such change has been authorized, articles of amendment, signed under the penalties of perjury by the executive officer and by the clerk, setting forth such change and the due adoption thereof, shall be delivered to the state secretary for filing.

M.G.L. c. 170, § 4 Capital structure upon incorporation

c. 170, § 4. Capital structure upon incorporation Section 4. A co-operative bank shall upon its incorporation have such capital structure as the board of bank incorporation shall deem adequate. Such capital structure may vary by the board based on the application and business plan submitted.

M.G.L. c. 170, § 5 Formation of co-operative bank; powers, privileges and duties related to corporations; agreement of association

c. 170, § 5. Formation of co-operative bank; powers, privileges and duties related to corporations; agreement of association Section 5. Fifteen or more individuals who associate themselves by a written agreement to form a co-operative bank may, upon compliance with sections 4 to 9, inclusive, become a corporation, with all the powers and privileges and subject to all the duties, restrictions and liabilities set forth in all laws relating to such corporations. The agreement of association shall specifically state: (1) that the incorporators thereto associate themselves with the intention of forming a corporation; (2) the name by which the corporation shall be known; (3) the location of the principal office of the corporation, which shall be within the commonwealth; (4) the purposes for which the corporation is formed and the nature of the business to be transacted; (5) the amount and classes of its capital stock and the number of shares into which any class is to be divided; the amount of the surplus account and the amount of the undivided profits account for a stock bank and the amount of the surplus account for a mutual bank; and (6) the name of each incorporator and the number of shares of capital stock, if any, which the incorporator agrees to take and the class or classes of such shares. The name of each incorporator shall be subscribed to the agreement of association.

M.G.L. c. 170, § 6 Notice of intention to form co-operative bank; application for certificate

c. 170, § 6. Notice of intention to form co-operative bank; application for certificate Section 6. A notice of the intention of the subscribers to form such a co-operative bank shall be given to the board of bank incorporation. A notice in such form as said board shall approve, shall be published at least once a week, for 3 successive weeks, in 1 or more newspapers designated by the board and published in the city or town in which it is proposed to establish the co-operative bank, or if there is no newspaper in such city or town, in a newspaper published in the city or town which is nearest to the proposed location. Such notice shall specify the names of the proposed incorporators, the name of the corporation and the location of the same. The subscribers to said agreement shall apply to the board for a certificate, which may be granted upon a finding that the public convenience and advantage will be promoted by the establishment of the co-operative bank. Such an application for a proposed co-operative bank shall be accompanied by an investigation fee, the amount of which shall be determined by the secretary of administration and finance pursuant to section 3B of chapter 7. In determining whether the public convenience and advantage will be promoted by the establishment of such co-operative bank, the board shall consider the adequacy of its capital structure, the general character of its management, the adequacy of banking facilities in the area and the convenience and needs of the community to be served. The board may grant such certificate, which shall be deemed to be revoked if the applicants do not become incorporated and begin business 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. If the board refuses to issue such certificate, no further proceeding shall be taken by the applicant during the year next following the date of such refusal except with the approval of the board, but the applicant may renew the application as of right after 1 year from the date of such refusal and may dispense with further notice or publication unless the board orders such notice or publication.

M.G.L. c. 170, § 7 First meeting of incorporators

c. 170, § 7. First meeting of incorporators Section 7. The first meeting of the incorporators shall be called by a notice signed either by the incorporator who is designated in the agreement for the purpose or by a majority of the incorporators and such notice shall state the time, place and purposes of the meeting. A copy of the notice shall, at least 7 days before the day appointed for the meeting, be given to each incorporator or left at each incorporator's residence or usual place of business, or deposited in the post office, postage prepaid, and addressed to each incorporator at such incorporator's residence or usual place of business, and another copy thereof and an affidavit of the signers that the notice has been duly served shall be recorded with the records of the corporation. If all the incorporators shall, in writing endorsed upon the agreement of association, waive such notice and fix the time and place of the meeting, no notice shall be required. At the first meeting, or at any adjournment thereof, the incorporators shall elect by ballot a temporary clerk who shall be sworn, adopt by-laws and in such manner as the by-laws may determine, elect directors, a clerk or secretary and such other officers as the by-laws may prescribe. The temporary clerk shall make and attest a record of the proceedings until the clerk or secretary has been chosen and sworn, including a record of such choice and qualification.

M.G.L. c. 170, § 8 Articles of organization; certificate of incorporation

c. 170, § 8. Articles of organization; certificate of incorporation Section 8. The president, clerk or secretary and a majority of the directors, as applicable, elected at such first meeting shall make and sign under penalties of perjury articles of organization in duplicate, setting forth: (1) a true copy of the agreement of association, the names of the incorporators thereto and the name of each of the officers and directors as applicable of the company; and (2) the date of the first meeting and the successive adjournments thereof, if any. One duplicate original of the articles so signed shall be submitted to the commissioner, and the other, together with the records of the proposed corporation, to the state secretary, who shall examine the same, and who may require such amendment thereof or such additional information as the secretary may consider necessary. If the commissioner finds that the articles conform to the 4 preceding sections relative to the organization of the corporation and that section 6 has been complied with, the commissioner shall so certify and endorse the commissioner's approval thereon. The articles shall be filed within 30 days thereafter in the office of the state secretary, who, upon receipt of a fee, the amount of which shall be determined annually by the secretary of administration and finance pursuant to section 3B of chapter 7, the state secretary shall issue a certificate of incorporation in the following form: COMMONWEALTH OF MASSACHUSETTS Be it known that whereas (the names of the subscribers to the agreement of association) have associated themselves with the intention of forming a corporation under the name of (the name of the corporation), for the purpose (the purpose declared in the agreement of association), with a capital stock or surplus, as applicable, of (the amount fixed in the agreement of association), and have complied with the statutes of the commonwealth in such case made and provided, as appears from the articles of organization of said corporation, duly approved by the state secretary and recorded in this office: Now, therefore, I (the name of the state secretary), secretary of the commonwealth of Massachusetts, do hereby certify that said (the names of the subscribers to the agreement of association), their associates and successors, are legally organized and established as, and are hereby made, an existing corporation under the name of (name of the corporation), with the powers, rights and privileges, and subject to the limitations, duties and restrictions, which by the law appertain thereto. Witness my official signature hereunto subscribed and the great seal of the commonwealth of Massachusetts hereunto affixed, this day of in the year (the date of the filing of the articles of organization). The state secretary shall sign the certificate of incorporation and cause the great seal of the commonwealth to be thereto affixed and such certificate shall have the force and effect of a special charter. The existence of every such corporation shall begin upon the filing of the articles of organization in the office of the state secretary. The state secretary shall also cause a record of the certificate of incorporation to be made and such certificate, or such record, or a certified copy thereof, shall be conclusive evidence of the existence of such corporation. A bank may amend its articles of organization if approved by its board and submitted to and approved by the bank's governing body except as provided in sections 10.05, 10.07 and 14.34 of chapter 156D. After approval by the board and governing body, the amendment shall be submitted to the commissioner for the commissioner's endorsement thereon before delivering the amendment to the state secretary for filing.

M.G.L. c. 170, § 9 List of stockholders; issuance of certificate authorizing corporation to begin transaction of business

c. 170, § 9. List of stockholders; issuance of certificate authorizing corporation to begin transaction of business Section 9. When all the capital stock has been issued for a stock bank, a list of the stockholders, with the name, residence and post office address of each, and the number of shares in each class held by each stockholder, shall be filed with the board of bank incorporation, which list shall be verified by the clerk of the corporation. Upon receipt of such list, the board shall cause an examination to be made of the method of payment of the capital stock, or the surplus account if a mutual bank of the personnel of the corporation, including the officers and directors thereof, and if, after such examination, it appears that the whole capital stock, surplus account and undivided profits account for a stock bank or surplus account for a mutual bank have been paid in cash, that all requirements of law have been complied with, that the bank is a member of the Federal Deposit Insurance Corporation, and that the qualifications of the personnel are satisfactory, the board shall, if satisfied that the public convenience and advantage will be promoted thereby, issue a certificate authorizing such corporation to begin the transaction of business. No such corporation shall begin the transaction of business until such a certificate has been granted.

M.G.L. c. 170, § 10 Applicability of sections to mutual banks and to stock banks

c. 170, § 10. Applicability of sections to mutual banks and to stock banks Section 10. A mutual bank shall be subject to sections 11 to 15, inclusive, and a stock bank shall be subject to sections 16 to 20, inclusive. Section 20 shall apply to both a mutual and a stock bank.

M.G.L. c. 170, § 11 By-laws of mutual bank; notice of regular and special meetings of shareholders; meetings of board of directors

c. 170, § 11. By-laws of mutual bank; notice of regular and special meetings of shareholders; meetings of board of directors Section 11. The shareholders of a mutual bank shall make and adopt the necessary by-laws consistent with law for the government of its affairs. The by-laws may provide for matters relative to the business and affairs of the corporation as appropriate to exercise all powers necessary, convenient or incidental to the purposes for which the corporation was formed. The clerk of the corporation shall give notice of all regular and special meetings of the shareholders by publishing notice thereof, at least 7 days before the meeting, in 1 or more newspapers published in the city or town wherein the main office of the corporation is situated or, if there is no newspaper published therein, then in a newspaper published in a nearby city or town in the same county; and for this purpose a newspaper which by its title page purports to be printed or published in such city, town or county and which has a circulation therein, shall be deemed to have been published therein. Such notice shall state the day, hour and place of the meeting and shall contain a brief statement of the nature of the business to be acted upon, except as may be provided in the by-laws with respect to the removal of officers and directors. The board of directors shall meet at intervals of not more than 2 months; provided however, that upon application in writing by the corporation, the commissioner may waive or modify this requirement. Unless the articles of incorporation, the by-laws or a resolution of the board otherwise provide, members of the board of directors or any committee designated thereby may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may simultaneously hear each other and participation by such means shall constitute presence in person at a meeting. Members may transmit any written authorizations that may be required during the meeting by electronic facsimile or other commercially acceptable transmission.

M.G.L. c. 170, § 12 Members; voting rights

c. 170, § 12. Members; voting rights Section 12. Each person who is recorded on the books of the corporation as the holder of 1 or more shares or accounts referred to in chapter 167D shall be deemed a member and shareholder of and depositor in the corporation. Each member shall be entitled to 1 vote at all shareholders' meetings, subject to the limitations contained in this section and such limitations, if any, as may be contained in the by-laws. At any meeting, no person who votes in 1 capacity shall be entitled to vote in any other capacity. A co-owner of any shares or accounts who does not vote in any other capacity may vote as the representative of the co-owners. A corporate fiduciary or other corporation or a partnership or association may vote by a person duly authorized, if such person does not otherwise vote; provided, however, a fiduciary, whether individual, corporate or otherwise, may vote on behalf of 1 trust or estate only. No person shall be entitled to vote either as a member or in any representative capacity unless such person shall have attained the age of 18 years. No person shall vote by proxy except as otherwise may be expressly authorized by law.

M.G.L. c. 170, § 13 Board of directors; clerk; directors and officers; records of meetings

c. 170, § 13. Board of directors; clerk; directors and officers; records of meetings Section 13. The business and affairs of every such corporation shall be managed by a board of not less than 5 and, except as otherwise provided by law, not more than 15 directors. The shareholders shall elect the directors, each of whom shall be a citizen of the United States and at least a majority of whom shall be citizens of the commonwealth and residents of the commonwealth. Directors shall be divided into 3 classes as nearly equal in number as possible and 1 of such classes shall be elected annually for a term of 3 years; provided, that during the minimum time necessary to accomplish the foregoing, 1 of said classes may be elected for a term of 1 year and 1 for a term of 2 years. All vacancies in the board or in any office may be filled by the board of directors for the unexpired term. A number of directors, not exceeding 2, may be elected by vote of a majority of the directors then in office if the by-laws so prescribe. The directors may employ such additional assistance and appoint or constitute such committees and advisory directors as they may deem necessary and determine the reasonable compensation therefor. The directors may authorize the continuance as honorary directors of those persons who shall have served as directors for 10 years or more and such honorary directors may be designated by the directors for an indefinite term and shall not be included in determining the minimum number of directors or the number of directors to be elected annually as provided herein. No such honorary director shall be deemed to be an officer or member of the board of directors of such corporation, nor shall such honorary director receive compensation or be required to attend meetings or be authorized or required to perform any duties. Except as otherwise provided in the by-laws, the directors may delegate to any officers, assistants and employees such functions, powers and authority as the directors deem advisable. The clerk of the corporation shall be chosen by the shareholders, and the president, vice president, treasurer, assistant treasurers, if any, and other officers whose election is not otherwise herein expressly provided for, shall be chosen by the board of directors. All directors and other officers shall be elected by ballot and shall be shareholders when nominated and elected. Each officer when appointed or elected shall take an oath that such officer will faithfully and impartially discharge the duties devolving upon such officer, and the fact that the oath has been taken shall be entered in the records of the corporation; and if a person appointed or elected does not, within 30 days thereafter, take the oath, the office shall thereupon become vacant. All officers shall continue to hold their offices until their successors shall have been chosen and qualified. If an officer ceases to be a shareholder, the office may be declared vacant by the board of directors. If a director fails both to attend the regular meetings of the board and to perform any of the duties devolving upon such director for 6 consecutive months, the office may be declared to be vacant by the board at the next regular meeting and if such director so fails for 12 consecutive months, the office shall be declared to be vacant by the board at the next regular meeting. A record of any vacancy shall be entered upon the books of the corporation and a transcript shall be sent by mail to the person whose office has been made vacant. The office of any director who seeks, or against whom, an order of relief is entered in a personal capacity, pursuant to Title 11 of the United States Code, or who, on examination in a supplementary process proceeding, has been found unable to pay a judgment, shall thereby be vacated. A record of any such vacancy shall be entered upon the books of the corporation. Any director whose office is so vacated shall again be eligible to serve as a director upon: the receipt of a discharge in bankruptcy under chapter 7 of said Title 11; the completion of all payments required pursuant to a plan of reorganization under chapter 11 of said Title 11; the completion of all payments under a plan of debt adjustment under chapter 13 of said Title 11; or the payment of said judgment. The records of all meetings of the corporation shall be read at such meetings by a shareholder other than the clerk and the records of all meetings of the board of directors shall be read at such meetings by a director.

M.G.L. c. 170, § 14 Security committee; audit committee

c. 170, § 14. Security committee; audit committee Section 14. At the first meeting of the board of directors, after the annual meeting of shareholders, the board shall elect from its own members a security committee of not less than 3 members, not less than 2 of whom shall report upon all real estate offered as security for loans made by the corporation, after having examined such real estate or after it shall have been examined by 1 or more appraisers considered to be qualified by the directors and appointed by them for that purpose. In no case, however, shall any member of the security committee or any appraiser make an official report upon property offered as security for a loan if such member has a personal interest in the property or in the proposed loan. The security committee shall perform other duties as may be required by law, and exercise other powers as delegated to it by the board of directors. At each meeting of the board of directors, the security committee or an officer designated by it shall submit a report to the board of directors. At the first meeting of the board of directors after the annual meeting of a mutual bank, the board shall elect an audit committee of not less than 3 directors who shall not be operating officers or members of the security committee. The members of the audit committee shall take an oath of office in the manner and within the period prescribed by section 13 and a record thereof shall be made and preserved as provided in said section 13. The directors shall determine the compensation, if any, to be paid to the members of the security committee and the audit committee.

M.G.L. c. 170, § 15 Treasurer and assistant treasurer; duties

c. 170, § 15. Treasurer and assistant treasurer; duties Section 15. The treasurer shall keep the financial accounts and have charge of all books and papers necessary therefor, and dispose of and secure the safekeeping of all money, securities and property of the corporation, in the manner and subject to the limitations from time to time designated by the board of directors, subject to applicable law. Such corporation may provide in its by-laws for assistant treasurers. An assistant treasurer may perform all the duties of the treasurer.

M.G.L. c. 170, § 16 Adoption of by-laws; regulations controlling assignment and transfer of shares; quorum

c. 170, § 16. Adoption of by-laws; regulations controlling assignment and transfer of shares; quorum Section 16. Such corporation may adopt by-laws for the proper management of its affairs and as appropriate to exercise all powers necessary, convenient or incidental to the purposes for which the corporation was formed. The corporation may establish regulations controlling the assignment and transfer of its shares. A majority in interest of the stockholders entitled to vote shall constitute a quorum at any meeting unless the by-laws require more than a majority.

M.G.L. c. 170, § 17 Stockholder voting; votes by proxy

c. 170, § 17. Stockholder voting; votes by proxy Section 17. Stockholders entitled to vote may vote in person or by proxy. No proxy dated more than 6 months before the date of the meeting named therein shall be valid and no proxy shall be valid after the final adjournment of such meeting. A proxy with respect to stock held in the name of 2 or more persons shall be valid if executed by any 1 of them unless at or prior to the exercise of the proxy such corporation receives a specific written notice to the contrary from any 1 of them. A proxy purporting to be executed by or on behalf of a stockholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. Except as otherwise provided in the articles of organization or by-laws of the corporation, special meetings of the stockholders may be called pursuant to section 7.02 of chapter 156D.

M.G.L. c. 170, § 18 Board of directors of co-operative bank; executive committee

c. 170, § 18. Board of directors of co-operative bank; executive committee Section 18. The business of such corporation shall be managed by a board of not less than 7 nor more than 25 directors. A majority of the directors shall be citizens of the commonwealth and residents therein. The directors shall be elected, in such manner as is provided in the by-laws, by the stockholders at their annual meeting or at a special meeting called for the purpose; provided, however, that if the by-laws so prescribe, a number of directors, not exceeding 2, may be elected by vote of a majority of the directors then in office. The directors shall hold office for such term, not exceeding 3 years, as is provided in the by-laws and until their successors are selected and have qualified. A director shall be eligible for reelection. Any vacancy in the board may be filled by appointment by the remaining directors and any director so appointed shall hold the office until the next election. A director of a stock bank shall own, in the director's own right and free of any lien or encumbrance, common stock, either of such corporation or of a company owning 75 per cent or more of the stock of such corporation, having a par value, or a fair market value on the date the person became a director, of not less than $1,000. Any director who ceases to be the owner of the required number of shares of stock shall vacate the office forthwith. Each director, when appointed or elected, shall take an oath that the director will faithfully perform the duties of the office and that the director is the owner, in such director's own right and free of any lien or encumbrance, of the amount of stock required by this section. The oath shall be taken before a notary public or justice of the peace and a record of the oath shall be made a part of the records of such corporation. The office of any director who seeks, or against whom, an order of relief is entered in a personal capacity, pursuant to Title 11 of the United States Code, or who, on examination in a supplementary process proceeding, has been found unable to pay a judgment, shall thereby be vacated. A record of any such vacancy shall be entered upon the books of the corporation. Any director whose office is so vacated shall again be eligible to serve as director upon: the receipt of a discharge in bankruptcy under chapter 7 of said Title 11; the completion of all payments required pursuant to a plan of reorganization under chapter 11 of said Title 11; the completion of all payments under a plan of debt adjustment under chapter 13 of said Title 11; or the payment of said judgment. In determining what a director reasonably believes to be in the best interests of such corporation, in considering proposed business combinations, as defined in paragraph (c) of section 3 of chapter 110F, a director may consider the interests of the corporation's employees, suppliers, creditors and customers, the economy of the state, region and nation, community and societal considerations, and the long-term and short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation. Each such corporation shall have an executive committee of not less than 3 members, who shall be elected by and from the directors and shall hold office during their pleasure. An executive committee may take any action that could be taken by the board of directors except that an executive committee may not: (1) authorize dividends or other distributions to shareholders; (2) approve or propose to the corporation's shareholders actions that require the approval of the corporation's shareholders; (3) change the number of members of the board of directors, remove directors from office or fill vacancies on the board of directors; (4) amend the corporation's articles of organization; (5) adopt, amend or repeal the corporation's by-laws; (6) authorize or approve reacquisition of shares of capital stock, except according to a formula or method prescribed by the board of directors; (7) take any action specifically required by law or regulation to be taken by the entire board of directors; or (8) approve a transaction described in section 8 of chapter 167I.

M.G.L. c. 170, § 19 Election of officers

c. 170, § 19. Election of officers Section 19. The clerk or secretary shall be elected by the stockholders at their annual meeting or at a special meeting duly called for the purpose. The president shall be elected by and from the board of directors and shall be chairman of the board unless the board designates a director in lieu of the president to be chairman. The directors shall elect the president, the vice president or vice presidents, treasurer and any other officers. The president, as may be permitted by law or by-law, may select other officers. The officers elected by the board shall hold their respective offices during the pleasure of the directors. The directors may fill a vacancy in the office of clerk or secretary until the next meeting of the stockholders.

M.G.L. c. 170, § 19A Repealed, 2014, 482, Sec. 55

M.G.L. c. 170, § 20 Action without meeting

c. 170, § 20. Action without meeting Section 20. Subsection (a) to (d), inclusive, shall apply to meetings of the board and its committees for both a co-operative bank in mutual form or in stock form. (a) Unless the articles of organization or bylaws provide that action, required or permitted by this chapter or another general law, shall be taken by the directors only 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 1 or more consents describing the action taken, in writing, signed by each director, or delivered to the corporation by electronic transmission, to the address specified by the corporation for the purpose or, if no address has been specified, to the principal office of the corporation, addressed to the secretary or other officer or agent having custody of the records of proceedings of directors and included in the minutes or filed with the corporate records reflecting the action taken. (b) Action taken under this section is effective when the last director signs or delivers the consent, unless the consent specifies a different effective date. (c) A consent signed or delivered under this section has the effect of a meeting vote and may be described as such in any document. (d) This section shall also apply to committees of the board and the members of the board.

M.G.L. c. 170, § 20A Repealed, 2014, 48, Sec. 55

M.G.L. c. 170, § 21 Cooperative banks employees retirement association

c. 170, § 21. Cooperative banks employees retirement association Section 21. Fifteen or more cooperative banks may form the Cooperative Banks Employees Retirement Association, in this section and in sections 22 and 23 hereinafter referred to as the retirement association, for the purpose of providing retirement benefits services through retirement plans which are qualified under section 401 of the Internal Revenue Code, in this section hereinafter referred to plans, to employees and customers of members of the association, as hereinafter provided. The retirement association, in its name and by and through its authorized officers, may: (a) establish plans and related trusts for its members; (b) make agreements and investments subject to such limitations as from time to time may be prescribed by law or the by-laws of the retirement association; (c) establish divisions, departments and other operating units within the retirement association and provide the same with appropriate names or other identifications, to assist the retirement association in carrying out the powers conferred upon it by law and its by-laws; (d) sue and be sued, plead and be impleaded; (e) enforce liens and other obligations and foreclose mortgages held by the retirement association on or with respect to real or personal property situated in the commonwealth or in any state or territory of the United States; (f) adopt an official seal and alter the same at pleasure; and (g) do such other acts and things as may be necessary to carry out the powers conferred upon it by law and its by-laws. Any bank or credit union chartered by the commonwealth, any such bank or credit union which has converted to federal charter and has its main office located in the commonwealth, any 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 and which has its main office or a branch office located in the commonwealth, the Massachusetts Bankers Association and its successors and any bank which is a voting member thereof, the Cooperative Banks Employees Retirement Association, former employees and annuitants of the Co-operative Central Bank, and such other banking institutions with their main office or any branch office located in the commonwealth, as may from time to time be provided for in the by-laws of the association and the respective employees of each of the foregoing, shall be eligible for membership in the association; provided, however, no bank that was eligible to be a member of the association before January 1, 2004, shall be eligible to become a member of the Savings Banks Employees Retirement Association or the Credit Union Employees Retirement Association, unless and until the Savings Banks Employees Retirement Association and the Credit Union 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. For the purposes of this section, and sections 22 and 23, ''bank'' or ''banks'' shall, unless the context otherwise requires, mean and include any or all of the organizations named or referred to in this paragraph; ''board of directors'' of a bank shall also, unless the context otherwise requires, mean and include the governing body of such organizations; and ''customer'' shall mean any person or business who has established a contractual relationship for banking business purposes with any banking institution located in the commonwealth which is a member of the association. Eligible employees may contribute a portion of their salaries and wages to or under plans established by the retirement association, to be deducted by the employing banks and paid to the plans or the retirement association. A participating bank may contribute to or under plans of the retirement association to the extent determined by its board of trustees. Contributions and benefits under the plans of the retirement association shall not exceed the limits, if any, imposed on such plans by the Internal Revenue Code of 1954 and the Employees Retirement Income Security Act of 1974, in this section hereinafter referred to as the code and ERISA, respectively. If the commissioner finds that the continuation of contributions by a participating bank subject to the commissioner's authority may affect its safety and soundness, including reducing its risk-based capital ratio below any prescribed regulatory level, said commissioner may order the bank to: (a) freeze its benefits and cease further funding for future benefit accruals under any plans qualified under section 401 of the federal Internal Revenue Code; (b) revise its benefits for future service under any such plans so that contributions on account of any employee will be limited to an appropriate percentage of compensation; or (c) terminate its participation in any such plans. All plans maintained by the retirement association shall conform to the code and ERISA and funds held under any such plans shall be invested in a manner as the retirement association shall determine. Copies of all plans shall be filed with the commissioner. Funds held under any of said plans shall be held by or used by the retirement association to the extent required by the code and ERISA for the exclusive purpose of providing plan benefits to participating members; provided, however, to the extent permitted by law, funds of the plans may be used to defray reasonable expenses of administering the retirement association and the plans, and expenses of investing the assets of the plans may be charged against the funds of the plans. To the extent that expenses necessary for the administration of the retirement association or the plans are not paid from the plans, they shall be paid by participating banks on a proportionate basis, as provided in the by-laws of the retirement 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. A participating bank, by vote of its board of directors, and a customer may adopt 1 or more of the plans of the retirement association for the benefit of its employees. Any bank which has adopted a plan of the retirement association for its employees may, if it is otherwise eligible, also establish an employee stock ownership plan. A bank, by vote of its board of directors, may directly or indirectly by means of a contribution to 1 or more of the trust funds held by the trustees of the retirement association supplement the retirement benefits being paid to its former employees or their beneficiaries on account of bank service; provided, however, no supplement of a retirement benefit shall exceed the retirement benefit multiplied by the increase in the cost of living since the retirement began. The increase in the cost of living is the percentage by which the national monthly consumer price index for all urban consumers, issued by the bureau of labor statistics of the United States Department of Labor, for the last November before the year in which payment is made is greater than the beginning index figure. The beginning index figure is the average of such monthly consumer price index figures for the year in which a retirement benefit was first paid to or with respect to a former employee. Except with respect to supplements first voted by a financial institution's governing board on or after January 1, 1981, and which are paid through 1 or more of the trust funds held by the trustees of the retirement association, no employing unit may become obligated to pay in future years any supplement authorized by this paragraph. Membership in the association is voluntary and any bank may establish or provide qualified retirement plans for its employees independent of the association; provided, however, nothing contained herein shall be construed as requiring any bank to provide qualified retirement plans to its employees.

M.G.L. c. 170, § 22 By-laws of cooperative banks employees retirement association

c. 170, § 22. By-laws of cooperative banks employees retirement association Section 22. The by-laws of the retirement association, and any amendments thereto, shall be submitted to the commissioner and shall prescribe the manner in which, and the officers and agents by whom, the retirement association may be conducted and the manner in which its funds may be invested and paid out. Such retirement association shall be formed when its by-laws have been approved and agreed to by a majority of the trustees of each of 15 or more cooperative banks and have been approved by the commissioner. The association shall annually, on or before August 1, report to the commissioner such statements of its membership and financial transactions for the year ending on the preceding December 31 as the commissioner may consider necessary to show its business and standing. The commissioner may verify such statement by an examination of the books and papers of the retirement association. The retirement association shall not be subject to chapter 32 or chapter 175 or other laws as relate to insurance companies or other retirement associations.

M.G.L. c. 170, § 23 Exemption of cooperative banks employees retirement association property and funds from taxation, operation of law relating to insolvency, attachment and execution; assignment of rights

c. 170, § 23. Exemption of cooperative banks employees retirement association property and funds from taxation, operation of law relating to insolvency, attachment and execution; assignment of rights Section 23. The property of the retirement association, the portion of the wages or salary of any employee deducted or to be deducted under sections 21 and 22, the right of an employee to an annuity or pension, and all of the employee's rights in the funds of the retirement association, shall be exempt from taxation and from the operation of any law relating to insolvency, and shall not be attached or taken on execution or other process to satisfy any debt or liability of the retirement association, a participating bank or any employee member of the retirement association. No assignment of any right in or to said funds or of any pension or annuity payable under section 21 shall be valid, except that deferred annuity contracts purchased by a participating bank on account of past service of eligible employees may be assigned to such bank prior to actual retirement. Nothing in this section shall prevent an employee's annuity or pension from being attached, taken on execution, assigned, or subject to other process to satisfy a support order under chapter 208, 209 or 273.

M.G.L. c. 170, § 24 Co-operative banks employees benefit association

c. 170, § 24. Co-operative banks employees benefit association Section 24. The participating members of the Co-operative Banks Employees Retirement Association, established by section 21, shall constitute as the Co-operative Banks Employees Benefit Association, in this section and in sections 25 and 26 hereinafter referred to as the benefit association, for the purpose of providing retirement benefits through retirement plans which are not qualified plans under section 401 of the Internal Revenue Code of the United States and for establishing employee welfare benefit plans, in this section hereinafter referred to as plans, for eligible employees of participating organizations. The benefit association, in its name and by or through its authorized officers, may: (a) establish plans and related trusts for eligible members participating therein; (b) make agreements, establish trusts and make or cause to be made investments subject to such limitations as may from time to time be prescribed by law or by the by-laws of the benefit association; (c) sue and be sued, plead and be impleaded; (d) enforce liens and other obligations and foreclose mortgages held by the benefit association on or with respect to real or personal property situated in the commonwealth or in any state or territory of the United States; (e) adopt an official seal and alter the same at pleasure; and (f) do such other acts that may be necessary to carry out the powers conferred upon it by law and its by-laws. For the purposes of this section and sections 22 and 23, ''bank'' and ''banks'' shall, unless the context otherwise requires, mean and include any or all member organizations and ''directors'' of a bank shall, unless the context otherwise requires, mean and include the governing body of each of such organizations. Eligible employees may contribute a portion of their salaries or wages to or under plans established by the benefit association, to be deducted by the employing banks and paid to the benefit association. A participating bank may contribute to or under plans of the benefit association to the extent determined by its directors. Contributions and benefits under the plans of the benefit association shall not exceed the limits, if any, imposed on such plans by the Internal Revenue Code of 1986 as amended, and the Employee Retirement Income Security Act of 1974, as amended, in this section called the code and ERISA, respectively. All plans maintained by the benefit association shall conform to the code and funds held under the plans of the benefit association shall be invested in such manner as the benefit association shall determine, consistent with the by-laws. Funds held under plans of the benefit association shall be held by or used by the benefit association for the exclusive purpose of providing plan benefits to eligible members and, as determined by the benefit association, may be used to defray reasonable expenses of administering the plans and investing the assets of the plans. To the extent that expenses necessary for the administration of the benefit association or the plans of the benefit association are not paid from the plans, they shall be paid by participating banks on a proportionate basis, as provided in the by-laws. A participating bank, by vote of its directors may adopt 1 or more of the plans of the benefit association for the benefit of its employees and their beneficiaries. Nothing in this section shall be construed so as to prevent any such bank from establishing its own employee welfare benefit plans or non-qualified retirement plan.

M.G.L. c. 170, § 25 By-laws of co-operative banks employees benefit association

c. 170, § 25. By-laws of co-operative banks employees benefit association Section 25. The trustees of the Co-operative Banks Employees Retirement Association shall prepare the by-laws of the benefit association and file the same with the commissioner. Said by-laws shall prescribe the manner in which, and the officers and agents by whom, the benefit association will be conducted and the manner in which its funds may be invested and paid out. They shall also provide that the trustees of the Co-operative Banks Employees Retirement Association shall serve as the initial trustees of the benefit association and shall continue such service for the term prescribed in such by-laws and for the election of subsequent trustees. Such benefit association shall annually, within 6 months after the close of its fiscal year, report to the commissioner such statements of its membership and financial transactions as the commissioner may consider necessary to show its business and standing. The commissioner may verify such statement by an examination of the books and papers of the benefit association. The benefit association shall not be subject to chapter 32 or chapter 175 or to such other laws that relate to insurance companies or other benefit associations.

M.G.L. c. 170, § 26 Exemption of co-operative banks employees benefit association property from taxation, operation of law relating to insolvency, attachment and execution; assignment of rights

c. 170, § 26. Exemption of co-operative banks employees benefit association property from taxation, operation of law relating to insolvency, attachment and execution; assignment of rights Section 26. The property of the benefit association shall be exempt from taxation and from the operation of any law relating to insolvency, and shall not be attached or taken on execution or other process to satisfy any debt or liability of the benefit association, a participating bank, or any employee member of the benefit association. No assignment of any right in or to said funds or of any pension or annuity payable under section 24 shall be valid, except that deferred annuity contracts purchased by a participating bank on account of past service of eligible employees may be assigned to such bank prior to actual retirement. Nothing in this section shall prevent an employee's annuity or pension from being attached, taken on execution, assigned, or subject to other process to satisfy a support order under chapter 208, 209 or 273.

M.G.L. c. 170, § 26A to 35 Repealed, 2014, 482, Sec. 55

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter170Fetched: 10/20/2026

CO&ndash;OPERATIVE BANKS