CREDIT UNIONS

M.G.L. pt. Part I, tit. Title XXII, ch. c. 171

in effect

M.G.L. c. 171, § 1 Definitions

c. 171, § 1. Definitions Section 1. As used in this chapter the following words shall, unless the context otherwise requires, have the following meanings:— ''Central Credit Union Fund, Inc.'', the corporation established by chapter 216 of the acts of 1932. ''Commissioner'', the commissioner of banks. ''Corporate credit union'', a federally chartered credit union primarily serving other credit unions. A corporate credit union is primarily serving other credit unions when the total dollar amount of the shares and deposits received from other credit unions plus loans to other credit unions exceeds 50 per cent of the total dollar amount of all such shares, deposits and loans. For the purposes of this definition, the term ''other credit unions'' shall include state and federally chartered credit unions. ''Credit union'', a corporation organized under this chapter or corresponding provisions of earlier laws. ''Credit union employees retirement association'' or ''retirement association'', the association formed pursuant to sections 82 to 84, inclusive. ''Dividend'', payments on shares paid from the earnings which actually have been collected during the dividend period next preceding and which remain after the deduction of all expenses, interest on deposits and shares and the amounts required to be set apart to the loan reserve and investment reserve or such dividend may be declared in whole or in part from the undivided earnings of preceding years remaining after the aforesaid deductions for such years. ''Federal credit union'', a credit union organized under the provisions of the Federal Credit Union Act. ''Foreign credit union'', a credit union organized under the laws of another state in the United States. ''Interest'', earnings paid on deposits. ''Low-income credit union'', a credit union whose membership meets the qualifications defined in 12 C.F.R. 701.34 and that has accepted the regulatory designation therein. ''Massachusetts Credit Union Share Insurance Corporation'', the corporation established by chapter 294 of the acts of 1961. ''Member'', a person who holds one or more shares in the credit union. ''Minor'', a person under 18 years of age. ''National Credit Union Administration'' or ''Administration'', the agency established by the Federal Credit Union Act to charter and regulate federal credit unions and which operates the National Credit Union Share Insurance Fund. ''Organization member'', any fraternal organization, voluntary association, partnership, limited partnership, limited liability partnership, limited liability company or corporation, having a usual place of business within the commonwealth and composed principally of individual members or stockholders who are themselves eligible to membership in a credit union or the Central Credit Union Fund, Inc. ''Share'' or ''share account'', a balance which constitutes the capital of the credit union and is held by the credit union in accordance with its by-laws. The sum of all shares and share accounts constitutes the equity capital of the credit union.

M.G.L. c. 171, § 2 Incorporation; agreement of association

c. 171, § 2. Incorporation; agreement of association Section 2. Ten or more persons, the majority of whom reside in the commonwealth, who have associated themselves by a written agreement with the intention of forming a corporation for the purpose of accumulating and receiving the savings of its members in payment for shares or on deposit, in making loans to them at reasonable rates for provident purposes and investing, as hereinafter provided, the funds so accumulated, may with the consent of the commissioner, become such a corporation upon complying with sections two to six, inclusive. Such corporation shall have all the powers and privileges, be subject to all the duties, restrictions and liabilities set forth in all General Laws relating to such corporations and may undertake such other activities relating to the purpose of the corporation as the by-laws may authorize. The agreement of association shall specifically state: (a) that the subscribers thereto associate themselves with the intention of forming a corporation; (b) the name by which the corporation shall be known. A corporation organized under this chapter shall include in its corporate name the words ''credit union''. Other distinguishing words may be used; (c) the location of the principal office of the corporation, which shall be within the commonwealth; (d) the purposes for which the corporation is formed and the nature of the business to be transacted; and (e) the name of each incorporator. Each incorporator shall subscribe his name to the agreement of association.

M.G.L. c. 171, § 3 Notice to commissioner; investigation fee

c. 171, § 3. Notice to commissioner; investigation fee Section 3. A notice of the intention of the subscribers to form such a credit union shall be given to the commissioner. Credit unions shall be organized under the provisions of sections two to six, inclusive, after such notice and hearing, if any, as the commissioner may require. Such an application for a proposed credit union shall be accompanied by an investigation fee, the amount of which shall be determined by the commissioner of administration under the provision of section three B of chapter seven. In determining whether the public convenience and advantage will be promoted by the establishment of such credit union, the commissioner shall consider the proposed field of operation and the standing of the proposed incorporators. Notwithstanding any other provision of this chapter, a community development credit union may be organized subject to the approval of the commissioner under such procedures, terms and conditions as said commissioner may impose. A community development credit union shall demonstrate to the satisfaction of said commissioner that most of its members are of low to moderate income or it intends to primarily serve low to moderate income individuals or areas. Such a credit union may accept shares or deposits from nonmembers. Notwithstanding any general or special law to the contrary, a credit union may be organized or designated as a low-income credit union subject to the approval of the commissioner under such procedures, terms and conditions as the commissioner may impose.

M.G.L. c. 171, § 4 First meeting of incorporators; notice

c. 171, § 4. First meeting of incorporators; notice Section 4. 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. Not less than 7 days before the day appointed for the meeting, a copy of the notice shall be: (i) given to each incorporator; (ii) sent to each incorporator electronically; (iii) left at each incorporator's residence or usual place of business; or (iv) deposited in the post office, postage prepaid and addressed to each incorporator at the incorporator's residence or usual place of business. Another copy of the notice and an affidavit of 1 of the signers that the notice has been duly served shall be recorded with the records of the corporation. If all of the incorporators shall, in writing endorsed upon the agreement of association, waive such notice and fix the time and place of the meeting, no such notice shall be required. At such first meeting, or at any adjournment thereof, the incorporators shall organize by the choice by ballot of a temporary clerk who shall be sworn, by the adoption of by-laws and by the election in such manner as the by-laws may determine, of 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. 171, § 5 Articles of organization; certificate of incorporation

c. 171, § 5. Articles of organization; certificate of incorporation Section 5. The clerk or secretary and a majority of the directors elected at such first meeting shall make and sign, under penalties of perjury, articles of organization in duplicate, setting forth: (a) a true copy of the agreement of association, the names of the subscribers thereto and the name, residence and post office address of each of the officers and directors of the corporation; (b) 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 he deems necessary. If he finds that the articles conform to the preceding sections relative to the organization of the corporation and that section three has been complied with, he shall so certify and endorse his approval thereon. The articles shall be filed within thirty 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 commissioner of administration under the provision of section three B of chapter seven, said 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), 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 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. He 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.

M.G.L. c. 171, § 6 Transaction of business; authorization; approval of by-laws; failure to commence

c. 171, § 6. Transaction of business; authorization; approval of by-laws; failure to commence Section 6. If it appears that all requirements of law have been complied with, that the credit union will have its shares and deposits insured by a federal agency and that the qualifications of the personnel are satisfactory, the commissioner, shall, if satisfied that the proposed field of operation is favorable to the success of such corporation and that the standing of the proposed incorporators is such as to give assurance that its affairs will be administered in accordance with the spirit of this chapter, 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. No credit union shall receive any deposits or payments on account of shares or make any loans, until its by-laws have been approved in writing by the commissioner. A credit union shall organize and commence business not more than 1 year after its date of incorporation, otherwise the charter of the credit union shall be void; provided, however, that the commissioner may grant an extension upon a demonstration of good cause and subject to such terms and conditions as the commissioner may impose. So much of chapter 167 as relates to supervision by the commissioner shall apply to credit unions so far as applicable. For the purpose of this section, a federal agency shall mean the National Credit Union Administration any successor entity or any other agency or instrumentality of the United States which insures shares and deposits in credit unions.

M.G.L. c. 171, § 6A Powers and permissible activities; regulations

c. 171, § 6A. Powers and permissible activities; regulations Section 6A. Notwithstanding other provisions of this chapter, a credit union organized under the provisions of this chapter and insured by the National Credit Union Share Insurance Fund may exercise any power and engage in any activity that is permissible for a credit union organized under the provisions of the Federal Credit Union Act in accordance with regulations promulgated by the commissioner pursuant to this section; provided, however, that any such activity is not otherwise prohibited. In determining whether or not to authorize any such activity, the commissioner shall also determine whether or not competition among credit unions will be unreasonably affected and whether public convenience and advantage will be promoted. Said commissioner shall promulgate regulations necessary to carry out the provisions of this section. Except for emergency regulations adopted pursuant to section 2 of chapter 30A, any such regulation, or any amendment or repeal thereof, shall, after compliance with all applicable provisions of said chapter 30A except section 5, shall be submitted to the general court.

M.G.L. c. 171, § 6B Savings promotion raffles

c. 171, § 6B. Savings promotion raffles Section 6B. (a) For the purposes of this section, the term ''savings promotion raffle'' shall mean a contest in which the sole consideration required for a chance of winning designated prizes is obtained by the deposit of a specified amount of money in a savings account or other savings program where each ticket or entry has an equal chance of being drawn and where the contest is subject to regulations that may be promulgated by the appropriate federal regulatory agency, as defined by 12 U.S.C. 5481. (b) A credit union may receive deposits in conjunction with a savings promotion raffle pursuant to the federal American Savings Promotion Act, Public Law 113–251. A savings promotion raffle conducted pursuant to this section shall not be a violation of section 7 of chapter 271. (c) The commissioner shall promulgate regulations necessary to implement and administer this section.

M.G.L. c. 171, § 7 Use of words ''credit union'' restricted; penalties

c. 171, § 7. Use of words ''credit union'' restricted; penalties Section 7. No person, partnership or association, and no corporation, except one incorporated under this chapter or corresponding provisions of earlier laws or the Federal Credit Union Act or one incorporated as a credit union under the laws of any other state and authorized to do business in the commonwealth, shall hereafter receive payments on shares or deposits from its members and loan such payments on shares and deposits in the manner of a credit union or transact business under any name or title containing the words ''credit union''; provided, however, that an association of credit unions or an organization, corporation or association, whose membership or ownership is primarily limited to credit unions, may transact business in accordance with the purposes for which it was established under any name or title containing the words ''credit union''. Whoever violates any provision of this section shall be punished by a fine of not more than one thousand dollars, and the supreme judicial and superior courts shall have jurisdiction in equity to enforce the provisions of this section.

M.G.L. c. 171, § 8 Location changes; branches and depots; consolidations or mergers; mobile branch banking

c. 171, § 8. Location changes; branches and depots; consolidations or mergers; mobile branch banking Section 8. The location of the main office of a credit union may be changed with the written consent of the commissioner. After such notice and hearing as the commissioner may require and with the commissioner's written permission and under such conditions as the commissioner may approve, a credit union may establish and maintain 1 or more branch offices or depots in the county wherein the main office is located, or on a site within 100 miles from the premises of the main office in a city or town in another county including on a site in the states of Connecticut, Maine, New Hampshire, New York, Rhode Island or Vermont, if in the opinion of the commissioner, the public would benefit by the establishment of additional credit union facilities. The establishment and maintenance of branch offices or depots in any 1 of the foregoing states shall also be established and maintained in accordance with the laws of that state. Any of the usual business transacted by a credit union at its main office may be transacted at a branch office. The business at a depot shall be transacted only on such days as may be designated by the board of directors and shall be limited to the receipt of deposits and the collection of moneys due or payable to the credit union and the business shall be subject to such other conditions, if any, as may be prescribed by the commissioner. Credit unions shall not submit more than 1 out-of-state branch application for the commissioner's review in any 12–month period. With the written consent of the commissioner a branch office or depot may be closed or its location may be changed. The offices of any credit union consolidating or merging pursuant to section 78 may be maintained as branch offices of the credit union with the written permission of and under such conditions, if any, as may be approved by the commissioner. Mobile branch banking may be authorized by the commissioner under conditions the commissioner may approve and subject to regulations the commissioner may establish. An investigation fee shall be submitted with any application to establish a branch office. The investigation fee shall be determined annually by the commissioner of administration under section 3B of chapter 7. To determine the amount of the investigation fee to establish a branch office, the commissioner of administration may make such classifications and differentiations of credit unions and may provide adjustments to the fee as necessary; provided, however, that such classifications and differentiations may be based on: (i) the asset size of the credit union; (ii) the number of existing branch offices of the credit union; or (iii) other criteria as determined by the commissioner of administration; and provided further, that the investigation fee shall be consistent with and equal to the amount of the investigation fee to establish a branch office imposed on banks in section 5 of chapter 167C.

M.G.L. c. 171, § 8A Purchase, establishment, installation, etc. of electronic branches; location; safeguards

c. 171, § 8A. Purchase, establishment, installation, etc. of electronic branches; location; safeguards [Text of section added by 2014, 482, Sec. 56. See also, Section 8A added by 2014, 466, Sec. 1, below.] Section 8A. For the purposes of this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Electronic branch'', an electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. Such term includes, but is not limited to automated teller machines and cash dispensing machines. Such term does not include a teller machine or similar device located on the premises of and operated solely by an employee of a financial institution or a point-of-sale terminal. ''Organization'', any person, corporation, association or partnership which assists or provides services to a financial institution or merchant in order to make available electronic fund transfers; provided, however, that a financial institution or merchant shall not be considered an organization. ''Point-of-sale terminal'', an electronic terminal located on the premises of a merchant when such terminal is used with the assistance of an employee of a merchant for a customer's purchase or lease of goods or services sold or leased by such merchant or adjustments thereto or the receipt of cash by the customer which is ancillary to the customer's purchase or lease of goods or services from such merchant; provided, however, that such terminal shall be deemed an electronic branch for the purposes of this chapter whenever it is used for any other electronic fund transfer, or for an electronic fund transfer involving a customer's account held by an organization, or for an electronic fund transfer solely for customers of a single financial institution or bank holding company subject to chapter 167A or the federal Bank Holding Company Act of 1956, 12 U.S.C. section 1841 et seq. A credit union shall comply with the federal Electronic Fund Transfer Act, 15 U.S.C. section 1693 et seq. and the regulations promulgated thereunder; provided, however, the maximum liability of a consumer under 15 U.S.C. section 1693g shall be limited to $50.00. After a vote of its board of directors, a credit union, except as otherwise provided in this section, may purchase, establish, install, operate, lease or use individually or with any other financial institution or organization or share with any other financial institution or organization any number of manned or unmanned electronic branches at which a customer may make deposits, withdrawals, transfers of funds, obtain advances against preauthorized lines of credit, cash checks or pay obligations, and any number of point-of-sale terminals; provided, however, that withdrawals from such electronic branches, other than those located at an office of a credit union, shall be made only from a demand deposit account, negotiable withdrawal order account, or statement account or against a preauthorized line of credit; and provided, further that the credit union shall have applied for and obtained the approval of the commissioner for such electronic branch except that a credit union at whose office such electronic branch is located need not have applied for or obtained such approval. The commissioner shall approve such application if, in the commissioner's opinion, such action will promote a sound banking system which provides for the needs of the people and business, encourages competition, discourages monopolies and does not ignore legislative policies. There shall be no geographical limitation on the location of electronic branches which a credit union may purchase, establish, install, operate, lease or use individually or with any other financial institution or organization or share with any other financial institution or organization; provided, however, that the site location for such electronic branches, other than an electronic branch located at an office of a financial institution or in another state, shall be subject to approval by, and regulation of, the commissioner. An electronic branch may be located in a mobile unit under such conditions and limitations as the commissioner, by regulation, shall establish. A credit union shall adopt and maintain safeguards to insure the safety of a customer using the electronic branch, to insure the safety of the funds, items and other information at the electronic branch and to assist in the identification of criminals. The commissioner may promulgate rules and regulations establishing minimum standards for such safeguards. Such safeguards shall be in place and operational at the time such electronic branch begins to transact business; provided, however, that such safeguards shall not apply to an electronic branch located at an office of a credit union. No such electronic branch located at other than the office of a credit union shall be manned or operated at any time by an employee of any financial institution, holding company of a financial institution or affiliate thereof, or any organization except on a temporary basis to instruct operators or customers, service the electronic branch or to use such electronic branch on said employee's own behalf. Chapter 171: Section 8A. Establishment of foreign credit union or out-of-state federal credit union branch offices or depots in the commonwealth; definition applicable to Secs. 8A to 8F [Text of section added by 2014, 466, Sec. 1. See also, Section 8A added by 2014, 482, Sec. 56, above.] Section 8A. For the purposes of this section and sections 8B to 8F, inclusive, the terms ''foreign credit union'' and ''out-of-state federal credit union'' shall mean a credit union with its principal place of business in the state of Connecticut, Maine, New Hampshire, New York, Rhode Island or Vermont. Any foreign credit union or out-of-state federal credit union doing business similar to any business referred to in section 2, may establish and maintain branch offices or depots in the commonwealth, if the foreign credit union or out-of-state federal credit union is expressly authorized to do so by the laws under which it is organized and operates; provided, however, that the laws of the state in which the credit union has its principal place of business expressly authorize, under conditions not more restrictive than those imposed by this chapter as determined by the commissioner, Massachusetts credit unions to establish and maintain branches and depots therein. Such foreign credit unions and out-of-state federal credit unions shall establish and maintain branches or depots in Massachusetts, in accordance with the same laws which govern such activities by Massachusetts credit unions; provided, however, that the initial branch office other than 1 established pursuant to chapter 167B, or, if more than 1, the branch deemed to be the initial office by such entities, shall be considered the main office in the commonwealth to determine the geographical limitations on the establishment of branch offices. The commissioner of banks shall promulgate rules and regulations relative to the administration and enforcement of sections 8A to 8F, inclusive. The rules and regulations shall include procedures for accepting applications from qualifying credit unions for approval to open a branch office.

M.G.L. c. 171, § 8B Educational credit union, student savings deposit and school branch office programs

c. 171, § 8B. Educational credit union, student savings deposit and school branch office programs Section 8B. A credit union, federal credit union or out-of-state federal credit union with a branch office in the commonwealth may establish educational credit union training programs, student savings deposit programs and school branch office programs. A credit union, federal credit union or out-of-state federal credit union with a branch office in the commonwealth shall conduct such a program under the terms and conditions as the commissioner may establish. A federal credit union or out-of-state federal credit union with a branch office in the commonwealth shall conduct such a program in compliance with applicable federal laws and regulations.

M.G.L. c. 171, § 8C Application by foreign credit union or out-of-state federal credit union to establish new branch in the commonwealth

c. 171, § 8C. Application by foreign credit union or out-of-state federal credit union to establish new branch in the commonwealth Section 8C. A foreign credit union or out-of-state federal credit union, if such credit union does not operate a branch in the commonwealth, may establish and maintain a new branch in the commonwealth; provided, however, that the credit union submits an application in the manner and form prescribed by the commissioner and the commissioner approves that application; provided further, that the laws of the state in which the credit union has its principal place of business expressly authorize, under conditions not more restrictive than those imposed by this chapter as determined by the commissioner, a Massachusetts credit union to establish and maintain a branch therein. Any such foreign credit union or out-of-state federal credit union shall operate under the supervision of the commissioner and in accordance with all applicable laws governing Massachusetts credit unions, including all rules and regulations promulgated thereunder. An out-of-state federal credit union shall operate the same as a federal branch which shall be subject to all laws of the commonwealth relative to community reinvestment, consumer protection, fair lending, establishment of intra-state branches, including but not limited to, sections 1 to 14A, inclusive, of chapter 93, and the applicable sections of chapters 93A, 167, 167B, 171, 183 and 184, including all rules and regulations promulgated thereunder and to such other laws of the commonwealth as are applicable to a federal credit union with its main office in the commonwealth.

M.G.L. c. 171, § 8D Examination of affairs of foreign credit union or out-of-state federal credit union

c. 171, § 8D. Examination of affairs of foreign credit union or out-of-state federal credit union Section 8D. The commissioner shall, in the manner prescribed in section 2 of chapter 167, examine any foreign credit union or out-of-state federal credit union that operates a branch in the commonwealth and shall inspect and examine the affairs of such a credit union, to the extent of its operations in the commonwealth, to ascertain its financial condition and whether it has complied with all applicable laws. The lawful charges incurred by reason of the examination shall be paid by the credit union examined. The commissioner shall preserve a full record of each such examination. Records and information contained in the report of any examination, other than information required by law to be published or to be open to the inspection of the public, shall be open only to the inspection of the commissioner, the commissioner's examiners and assistants and other officers of the commonwealth as may have occasion and authority to inspect the records in the performance of their official duties. Nothing in this section shall be construed to prohibit the required production of such records and information contained in examination reports before a court of this commonwealth or a master or auditor appointed by the court in a criminal or civil proceeding therein pending, affecting the branch in the commonwealth or out-of-state branch, its officers, directors or employees. Copies of reports of such examinations shall be furnished to the parent credit union of the branch examined for its use only and shall not be exhibited to any other person, organization or agency without the prior written approval of the commissioner. The commissioner may, in the commissioner's discretion, furnish to any credit union regulatory agency or law enforcement agency or the banking departments of other states such information, reports and statements relating to the institutions under the commissioner's supervision as the commissioner deems appropriate. The commissioner, in making the examination, shall have free access to the vaults, books and papers of foreign credit union or out-of-state federal credit union and may summon the directors, officers or agents thereof, and such other witnesses as deemed necessary for examination relative to the affairs, transactions and condition of such credit unions, and for that purpose is empowered to administer oaths. Notwithstanding anything in this section to the contrary, the commissioner may enter into cooperative agreements with credit union regulators in jurisdictions other than the commonwealth to facilitate the regulatory supervision of branches in the commonwealth and out-of-state branches including agreements relative to the coordination of examinations or joint participation in examinations of the branches and may accept reports of examinations by the regulators pursuant to such agreements. The commissioner may also enter into such agreements providing for enforcement actions against branches in the commonwealth and out-of-state branches. Any such agreement may include provisions relative to the amount and assessment of fees for an examination or enforcement actions. Nothing in this section shall be construed as limiting in any way the authority of the commissioner to independently conduct examinations of and enforcement actions against any branch in the commonwealth or out-of-state branch.

M.G.L. c. 171, § 8E Registration of foreign credit union or out-of-state federal credit union operating a branch in the commonwealth

c. 171, § 8E. Registration of foreign credit union or out-of-state federal credit union operating a branch in the commonwealth Section 8E. Each foreign credit union or out-of-state federal credit union that operates a branch in the commonwealth shall register with the commissioner on forms prescribed by the commissioner which shall include information regarding the financial condition, operations and management of the credit union and other related matters the commissioner may deem necessary or appropriate to carry out this chapter. The commissioner, from time to time, may require reports under oath to keep informed as to whether this chapter and the rules and regulations established thereunder have been complied with.

M.G.L. c. 171, § 8F Injunction to restrain foreign credit union or out-of-state federal credit union from further proceeding with business

c. 171, § 8F. Injunction to restrain foreign credit union or out-of-state federal credit union from further proceeding with business Section 8F. If, upon examination, it appears that a foreign credit union or out-of-state federal credit union is insolvent, or that its capital is impaired, or that its condition is such as to render the continuance of business hazardous to the public or to those having funds in its custody, the commissioner shall apply, or if any such credit union appears to have exceeded its powers or failed to comply with applicable law may apply, to the supreme judicial court, which shall have jurisdiction in equity on such application, to issue an injunction restraining the credit union, in whole or in part, from further proceeding with its business, and to make further orders or decrees as justice and equity may require. The court may appoint 1 or more receivers to take possession of its property and effects, subject to such directions as may from time to time be prescribed by the court.

M.G.L. c. 171, § 9 By-laws

c. 171, § 9. By-laws Section 9. The shareholders of every such corporation shall make and adopt by-laws, consistent with law, for the government of its affairs. The by-laws shall provide for and determine: (a) The name of the corporation. (b) The purposes for which it is formed. (c) The condition of residence, occupation or association which qualify persons for membership. (d) The conditions on which shares may be paid in, transferred and withdrawn. (e) The conditions on which deposits may be received and withdrawn. (f) The method of receipting for money paid on account of shares or deposits or repaid on loans. (g) The number of directors and the number of years for each term. (h) The number of members of the credit committee, if applicable, as required by the by-laws. (i) The time of holding regular meetings of the board of directors, the credit committee, if applicable, as required by the by-laws and the auditing committee. (j) The duties of the several officers. (k) The entrance fees, if any, to be charged. (l) The fines, if any, to be charged for failure to meet obligations to the corporation punctually. (m) The date of the annual meeting. (n) The manner in which members shall be notified of the annual meeting and special meetings. (o) The number of members who shall constitute a quorum at all meetings. (p) Such other policies as may be deemed to be necessary.

M.G.L. c. 171, § 10 Amendment of by-laws

c. 171, § 10. Amendment of by-laws Section 10. The by-laws may be amended at any annual meeting, or at a special meeting called for the purpose, by a majority vote of all of the members present and entitled to vote; provided, however, that the notice of the meeting and of the proposed amendment is given each member in the manner prescribed in said by-laws. No amendment or amendments containing a change in the conditions of residence, occupation or association which qualify persons for membership shall become operative until approved in writing by the commissioner.

M.G.L. c. 171, § 11 Annual meetings; special meetings; notice; voting

c. 171, § 11. Annual meetings; special meetings; notice; voting Section 11. The annual meeting of the corporation shall be held at such time and place as the by-laws prescribe but not later than one hundred and twenty days after the close of the fiscal year. The fiscal year of every credit union shall end at the close of business on the last business day of December. Special meetings may be called at any time by a majority of the directors and shall be called by the clerk upon written application of ten or more members entitled to vote. Notices of all meetings of the corporation and of all meetings of the board of directors and of committees shall be given in the manner prescribed in the by-laws; provided, however, that all meetings of the shareholders and depositors shall be posted in a conspicuous place, for at least seven days prior to the meeting, within each office or branch office of said corporation. A member shall not have more than 1 vote and, after a credit union has been incorporated for 1 year, a member shall not be entitled to vote or be a candidate for director until the member has been a member for not less than 3 months. An organization member or a person who is a party to a joint account may cast 1 vote on the share or deposit account at any of its meetings by a duly delegated agent or a party to the joint account; provided, however, that a minor shall not have the right to vote. A member may vote: (i) in person; (ii) by mail; or (iii) by electronic means; provided, however, that each credit union shall set forth in its by-laws the method of voting to be used by its members; provided further, that the commissioner may impose conditions or limitations on such voting methods. The members shall elect directors, vote on any proposed amendment to the by-laws and act on such matters as required under law at each annual meeting.

M.G.L. c. 171, § 12 Directors; terms; inability to pay judgment; classes

c. 171, § 12. Directors; terms; inability to pay judgment; classes Section 12. The business and affairs of a credit union shall be managed by a board of not less than 7 directors. A credit union may limit the number of employees serving as directors in its by-laws. The directors shall be elected at the annual meetings. All members of said board shall be sworn to the faithful performance of their duties and shall hold their several offices unless sooner removed as hereinafter provided, until their successors are qualified. A record of every such qualification shall be filed and preserved with the records of the corporation. Directors shall be elected for not less than one nor more than three years, as the by-laws shall provide. 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, the completion of all payments required pursuant to a plan of reorganization under chapter 11, the completion of all payments under a plan of debt adjustment under chapter 13, or the payment of the judgment. If the term is more than one year, they shall be divided into classes, and an equal number, as nearly as may be, elected each year. If a director ceases to be a member of the credit union, his office shall thereupon become vacant. The by-laws may authorize the continuance, as honorary directors, of those persons who shall have served as directors for ten years or more. No such honorary director shall be deemed to be an officer or member of the board of directors of such corporation, nor shall he receive compensation or be required to attend meetings or be authorized to perform any duties.

M.G.L. c. 171, § 13 Powers and duties of directors; quorum; removal from office; honorary president; participation in meetings by means of conference telephone or similar electronic communications equipment

c. 171, § 13. Powers and duties of directors; quorum; removal from office; honorary president; participation in meetings by means of conference telephone or similar electronic communications equipment Section 13. The board of directors shall have the general direction of the affairs of the corporation and shall meet not less than once each month. A quorum shall consist of not less than a majority of the directors. If less than a quorum is present, a majority of those present may adjourn the meeting until the next regular meeting or another time prior to the next regular meeting. The board of directors shall act upon all applications for membership and determine the rate of interest to be paid on deposits; provided, however, that the board of directors may delegate such duties. The board of directors may declare dividends as provided in section 29 and shall fill vacancies in the board of directors and committees until the next annual election; provided, however, that the board of directors shall not delegate such duties. The board of directors may authorize the establishment or the discontinuance of deposit accounts. The board of directors shall make recommendations to the members of the credit union relative to the need of amendments to the by-laws and other matters upon which the members should act at any regular or special meeting. The board of directors may borrow money for and on behalf of the credit union as authorized by section 73. The board of directors may, by a 2/3 vote, remove from office for cause an officer or a member of a committee. The board of directors may elect an honorary president, who shall be a member of the credit union; provided, however, that an honorary president shall not be compensated in any way by the credit union. The board of directors may appoint associate directors who shall not be compensated or vote. Unless the articles of organization or by-laws provide that an action required or permitted under this chapter or another provision of the General Laws to be taken by the board of directors shall be taken at a meeting, the action may be taken without a meeting if the action is taken by the unanimous consent of the members of the board of directors. The action shall be evidenced by at least 1 written consent describing the action taken, signed by each director and delivered to the credit union by electronic transmission or sent to the address specified by the credit union for that purpose, or to the principal office of the credit union if no address has been specified, addressed to the secretary or other officer or agent having custody of the records of proceedings of the board of directors and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this section is effective when the last director signs or delivers the consent, unless the consent specifies a different effective date. A consent signed or delivered under this section has the effect of a meeting vote and may be described as such in any document. This section shall also apply to committees of the board of directors and the members thereof. Unless the by-laws otherwise provide, a member of the board of directors or any committee designated thereby may participate in a meeting of the board or committee by means of a conference telephone or similar electronic communications equipment by means of which persons participating in the meeting may simultaneously hear each other, and participation by those means shall constitute presence in person at a meeting. A member may transmit a written authorization that may be required during the meeting by electronic facsimile or other commercially acceptable transmission.

M.G.L. c. 171, § 14 Expulsion of members

c. 171, § 14. Expulsion of members Section 14. The board of directors may expel from a credit union a member who: (i) has not carried out the member's engagements with the credit union; (ii) has been convicted of a criminal offense; (iii) neglects or refuses to comply with this chapter or the by-laws of the credit union; (iv) habitually neglects to pay the member's debts; or (v) has deceived the corporation or any committee thereof with regard to the use of borrowed money; provided, however, that a member shall not be expelled until the member has been provided with reasonable notice in writing of the charges against the member and with an opportunity to be heard; provided further, that a director who becomes insolvent or bankrupt shall be withdrawn from the board of directors automatically, with no requirement for notice or an opportunity to be heard; and provided further, that the board of directors may suspend from the credit union any member who has been convicted of a criminal offense. The amounts paid in on shares or deposited by members who have withdrawn or have been expelled shall be paid to them, in the order of withdrawal or expulsion, but only as funds therefor become available and after deducting any amounts due from such members to the credit union. Such expulsion shall not operate to relieve a member from any outstanding liability to the credit union.

M.G.L. c. 171, § 15 Officers and committee members; election and appointment; loan officers

c. 171, § 15. Officers and committee members; election and appointment; loan officers Section 15. The directors, at a regularly scheduled meeting or at a special meeting of the directors called for the purpose and thereafter at their first meeting after the annual meeting, shall elect from their own number a chairman of the board and a clerk and shall elect persons who may or may not be directors to hold the offices of president and treasurer and may elect vice-presidents and assistant treasurers, all of whom shall be officers of the corporation and shall elect such other officers as may be necessary for the transaction of the business of the credit union. The offices of president and treasurer shall not be held by the same person. The offices of president and chairman of the board may be held by the same person and the offices of clerk and treasurer may be held by the same person. At such meeting, the directors shall elect an auditing committee from among the directors, an investment committee comprised of at least 1 member of the board of directors and a credit committee, if applicable, comprised of at least 1 member of the board of directors. Each such committee shall be comprised of not less than 3 members and not more than 5 members; provided, however, that no member of the board of directors shall be a member of both the credit committee, if any, and the auditing committee. Officers shall be sworn to the faithful performance of their duties and shall hold their several offices unless sooner removed, as provided in section thirteen, until their successors are qualified. The board of directors may appoint an executive committee or a membership officer from among the board or other employees, other than the treasurer, an assistant treasurer or a loan officer, and authorize the committee or officer to approve applications for membership under such conditions as the board of directors may prescribe.

M.G.L. c. 171, § 16 Auditing committee; powers and duties

c. 171, § 16. Auditing committee; powers and duties Section 16. The auditing committee shall keep fully informed at all times as to the financial condition of the credit union. The auditing committee shall: (i) hold meetings not less than once each month; (ii) keep records of the meetings; (iii) certify the monthly statements submitted by the treasurer; (iv) make a thorough annual audit of the books, including income and expenses; (v) report to the board of directors its findings, together with any recommendations; and (vi) make an annual report at the annual meeting. The auditing committee shall, under regulations prescribed by the commissioner and within a period of time not exceeding three years, cause an examination and audit to be made of the books, securities, cash, assets, liabilities, income and expenditures of the credit union including a trial balance of the deposit and share account. Such examination and audit shall be made in such form and such manner as the commissioner may prescribe and such examination and audit of a credit union having assets over five million dollars shall be made by a certified public accountant or public accountant not connected with the credit union.

M.G.L. c. 171, § 17 Credit committee; powers and duties

c. 171, § 17. Credit committee; powers and duties Section 17. The credit committee, if any, shall hold meetings not less than once in each month, act on all applications for loans and approve, in writing, all personal loans granted and the security, if any, pledged therefor, except as provided in this section. The credit committee shall submit to the board of directors all applications for loans to be secured by mortgages of real estate with its recommendations thereon. The credit committee may reasonably delegate its duties to employees in accordance with written loan policies that establish appropriate limits and standards and that are consistent with safe and sound banking practices. No personal loans shall be made unless all of the members of the credit committee who are present when the application is considered, which number shall constitute at least two-thirds of the members of said committee, approve such loan. No loan shall be granted unless the members of said committee are satisfied that the loan promises to be of benefit to the borrower. Notwithstanding the foregoing, the credit committee may appoint 1 or more employees of the credit union, who need not be members of the board of directors or the credit committee, as loan officers and delegate to them the authority to approve applications for loans authorized by this chapter. The delegation of authority shall be in writing, shall be approved by the board of directors, shall define the term and scope of the authority, and shall include standards for approving loans to be secured by mortgages of real estate which are consistent with the written loan policies of the credit union. Not more than 1 member of the credit committee may be appointed as a loan officer. Applications for loans to be secured by a mortgage on real estate not approved by a loan officer shall be acted upon by the credit committee. Applications for loans to be secured by a mortgage on real estate approved by a loan officer or the credit committee shall require ratification by the board of directors.

M.G.L. c. 171, § 18 Investment committee; powers and duties

c. 171, § 18. Investment committee; powers and duties Section 18. Investments authorized by section sixty-seven and other applicable sections may be made by the investment committee and a report of any such investments shall be submitted to the board of directors at its regular meeting next following the date upon which any such investment was made in such form as the directors may require and such report and any action taken by the board thereon, shall be made part of the records of such meeting. The investment committee shall hold meetings not less than once in each month. The investment committee may reasonably delegate its duties to employees in accordance with written investment policies that establish appropriate limits and standards and that are consistent with safe and sound banking practices.

M.G.L. c. 171, § 19 Directors and officers; limitations on services with other financial institutions

c. 171, § 19. Directors and officers; limitations on services with other financial institutions Section 19. No person shall be a director of two credit unions at the same time and no person holding the office of president, treasurer, member of the credit committee, member of the auditing committee or bookkeeper or an employee having access to securities or cash in a credit union shall hold any of said offices or be employed in a capacity in which he has access to securities or cash in another credit union at the same time. After January first, nineteen hundred and seventy-five, a director or other officer of a credit union may at the same time be a trustee, director or other officer of a savings bank, cooperative bank, federally chartered savings and loan association, trust company, a bank holding company or any affiliate, a mortgage company owned by a bank or national banking association if, in such case, there is in force a permit therefor issued by the commissioner, in writing, with the reasons thereon stating why the public interest warrants its issuance, after reasonable notice and an opportunity to be heard, who is hereby authorized to issue such permit if, in his judgment, it is not incompatible with the public interest, and to revoke any such permit whenever he finds, after reasonable notice and opportunity to be heard, that the public interest warrants its revocation; provided, however that the provisions of this section shall not apply to any director or other officer who held such position at the time of incorporation of said credit union.

M.G.L. c. 171, § 20 Compensation and expense reimbursement; restrictions on loans to directors

c. 171, § 20. Compensation and expense reimbursement; restrictions on loans to directors Section 20. No member of the board of directors shall receive compensation for his services as a member of the board or as a member of any committee. A director may be reimbursed for actual expenses incurred in the performance of responsibilities of director or as a member of any committee; provided, however, that such expenses must be itemized in writing and approved by the board of directors. Such expenses shall be reported to the members at the next annual meeting or at a special meeting called for that purpose. The officers elected by the board shall receive such compensation as it may authorize. No member of said board shall borrow from the corporation, by means of a personal loan upon his note, to an amount in excess of the total of his shares and deposits in said credit union, and the accumulated earnings standing to his credit thereon on the books of the corporation or with sufficient collateral pledged to secure the same made up of negotiable bonds or notes of the United States valued at not more than eighty percent of their market value or by the assignment of his passbook in a savings bank, cooperative bank or a federal savings and loan association, all doing business in the commonwealth or policies issued by life insurance companies authorized to transact business in this commonwealth valued at not more than their cash surrender value, unless approved by vote of two-thirds of the other members of said board.

M.G.L. c. 171, § 21 Bond requirements

c. 171, § 21. Bond requirements Section 21. The treasurer and all other officers and employees of a credit union having access to its cash or negotiable securities shall give bond to the credit union at its expense in such amounts and with such surety or sureties and conditions as the commissioner may prescribe. The directors may require bonds of such other officers, employees or agents as they deem advisable. The persons required to give bond may be included in one or more blanket or schedule bonds; provided, however, that bonds upon which changes are made are approved by the commissioner as to the amounts and the conditions thereof and as to the sureties thereon. Each credit union shall file with the commissioner on a form prescribed by him a certificate from the insurer indicating compliance with all requirements prescribed by the commissioner. The commissioner may prescribe the manner of custody and safekeeping of such bonds by the credit union. Subject to the approval of the commissioner of insurance as to the form and conditions thereof, a schedule bond may be issued to an association of credit unions covering the officers and employees of the credit unions which are members of such association, notwithstanding that chapter one hundred and seventy-five does not expressly authorize the issuance of such a schedule bond.

M.G.L. c. 171, § 22 Treasurer's additional duties under chapter 167 and this chapter

c. 171, § 22. Treasurer's additional duties under chapter 167 and this chapter Section 22. In addition to the duties imposed by law upon the treasurer of a credit union or the officer or employee thereof charged with the duties and functions usually preformed by the treasurer, he shall also be responsible for the performance of all acts and duties required of such corporation by the provisions of chapter one hundred and sixty-seven or one hundred and seventy-one except in so far as such performance has been expressly imposed on some other officer or employee of such credit union by its regulations or by-laws or by provision of law.

M.G.L. c. 171, § 23 Nonfeasance, misfeasance and malfeasance; penalties

c. 171, § 23. Nonfeasance, misfeasance and malfeasance; penalties Section 23. Any officer, director, agent or employee of any credit union, who knowingly and wilfully does any act forbidden to him or to such credit union by any provision of chapter one hundred and sixty-seven or one hundred and seventy-one, or who knowingly and wilfully aids or abets the doing of any act so forbidden to such credit union or to any other officer, director, agent or employee thereof, or who knowingly and wilfully fails to do any act required of him by any such provision, or who knowingly and wilfully fails to do any act which is required of such credit union by any such provision the performance of which is imposed on him by the by-laws or regulations of the credit union or by provision of law or the responsibility for the non-performance of which is placed upon him by section twenty-two shall, if no other penalty against him in his aforesaid capacity is specifically provided, be punished by a fine of not more than one thousand dollars or by imprisonment for not more than one year, or both.

M.G.L. c. 171, § 24 Indemnification of directors, officers and employees; liability insurance

c. 171, § 24. Indemnification of directors, officers and employees; liability insurance Section 24. A credit union may indemnify its directors, officers, employees and other agents to whatever extent specified in or authorized by a by-law adopted pursuant to law. Such indemnification may include payment by the credit union of expenses incurred in defending a civil or criminal action or proceeding in advance of the final disposition of such action or proceeding upon receipt of an undertaking by the person indemnified to repay such payment if he shall be adjudicated to be not entitled to indemnification under this section. Any such indemnification may be provided although the person to be indemnified is no longer an officer, director, employee or agent of the credit union. No indemnification shall be provided for any person with respect to any matter as to which he shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interests of the credit union. A credit union shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or other agent of the credit union against any liability incurred by him in any such capacity or arising out of his status as such, whether or not the credit union would have the power to indemnify him against such liability.

M.G.L. c. 171, § 25 Insurance benefits for employees, officers and directors

c. 171, § 25. Insurance benefits for employees, officers and directors Section 25. A credit union may provide group life insurance, group accident and health insurance or group medical, surgical or hospital insurance or benefits or all or any combination thereof, for its employees, officers, and directors. Directors ineligible for the group benefit may be reimbursed up to the net dollar amount of the individual participant cost of the group benefit. The commissioner may establish regulations necessary to provide reasonable restrictions in connection therewith. The commissioner may also make adjustments and exceptions as in his judgment are necessary to carry out or facilitate compliance with this section.

M.G.L. c. 171, § 26 Annual reports

c. 171, § 26. Annual reports Section 26. Annually, not more than 30 days after the last business day of December, a credit union shall make a report to the commissioner in such form as the commissioner may prescribe accurately showing its condition at the close of business on that day and containing such other information as the commissioner may require. The annual report shall be in accordance with generally accepted accounting principles and shall fairly present the credit union's condition as of the last business day of the credit union's fiscal year. A statement of condition of a credit union shall be available for examination for reasonable purposes by members at the principal office of a credit union during business hours or made available to a member upon reasonable request.

M.G.L. c. 171, § 27 Balance sheets

c. 171, § 27. Balance sheets Section 27. Each such corporation shall prepare a balance sheet, in accordance with generally accepted accounting principles, which presents fairly its condition as of the last business day of its fiscal year. A copy of said balance sheet shall be made available to a depositor upon request.

M.G.L. c. 171, § 28 Preservation of records

c. 171, § 28. Preservation of records Section 28. Each credit union shall preserve all of its records of original and final entry, including cancelled checks and withdrawal and deposit slips, for a period of at least six years from the date of making the same or from the date of the last entry thereof. Such records shall be preserved in their original form for two years and thereafter may be preserved on microfilm or microfiche. All original records, age three years or older, may be stored in off property locations; provided, however, that withdrawal slips may be destroyed after a period of two years, if such withdrawal slips are properly microphotographed and the microphotographs shall be preserved for the period provided in this section.

M.G.L. c. 171, § 29 Shares and deposits; dividends

c. 171, § 29. Shares and deposits; dividends Section 29. The capital of a credit union shall be unlimited in amount and shall consist of shares and deposits. Shares shall be of a par value of not less than five dollars but not more than twenty-five dollars each and shall be subscribed and paid for in such manner as the by-laws of the credit union shall prescribe. Dividends may be declared by the board of directors at least once every year for such periods as shall be determined by the board of directors and paid from the earnings which actually have been collected during the dividend period next preceding and which remain after the deduction of all expenses, interest on deposits and shares and the amounts required to be set apart to the loan reserve and investment reserve or such dividend may be declared in whole or in part from the undivided earnings of preceding years remaining after the aforesaid deductions for such years; provided, however, that if the by-laws of the credit union so provide, a share purchased or deposit made on or before the tenth day after the day on which shares or deposits begin to draw dividends or interest, as provided in the by-laws or regulations, or, if such tenth day be a Saturday, Sunday or legal holiday, on or before the next business day succeeding such tenth day and remaining in the credit union as shares or deposits through the balance of the monthly period, shall be construed as having been on deposit as shares or deposits one full month within the meaning of this section. Such dividends may be paid on fully paid shares outstanding at the close of the dividend period, but shares which become fully paid during such dividend period shall be entitled only to a proportionate part of such dividend calculated from the first day of the month following such payment in full. Dividends due to a member shall, at his election, be paid to him in cash or credited to his account in either shares or deposits; provided, however, that dividends may not be declared or paid on less than one full share. Dividends may be paid at various rates based on the type and amount of an account or on the terms and conditions applicable to said accounts. The board of directors shall determine the rate of interest to be paid on deposits.

M.G.L. c. 171, § 30 Limitations on shares and deposits

c. 171, § 30. Limitations on shares and deposits Section 30. Every member of a credit union shall hold 1 share and may hold shares or make deposits, or both, therein, in his own name and he may jointly, with one or more persons, hold shares or make deposits, or both. An organizational member may purchase shares or make deposits; provided, however, that the total of the payments by all organizational members shall not exceed, at any time, 25 per cent of the assets of the credit union. This section shall apply to members of credit unions which are insured by the National Credit Union Administration and to members of low-income credit unions; provided, however, that no such credit union shall accept deposits or payments for shares for the account of a shareholder or depositor in excess of the amount which is insured by the National Credit Union Administration unless the excess is insured by the Massachusetts Credit Union Share Insurance Corporation pursuant to section 6D of chapter 294 of the acts of 1961.

M.G.L. c. 171, § 31 Negotiable withdrawal order accounts

c. 171, § 31. Negotiable withdrawal order accounts Section 31. A credit union may authorize accounts that would allow withdrawals by negotiable or transferable instruments for the purpose of making transfers to third parties. Such accounts shall be designated as negotiable withdrawal order accounts. Said accounts shall be subject to regulations of the commissioner. A credit union which accepts deposits or shares for accounts subject to withdrawal by negotiable or transferable instrument for the purpose of making transfers to third parties shall, if requested by the depositor or shareholder, provide without charge not less than 25 cancelled instruments or legible copies of the fronts and backs thereof per calendar year; but, if requested by a depositor who is blind the credit union shall make additional accommodations to provide additional cancelled instruments or information thereon as is possible in accordance with the Check Clearing for the 21st Century Act, 12 USC 5001 et seq., and regulations promulgated thereunder. Section 4–406 of chapter 106 shall be subject to this section.

M.G.L. c. 171, § 31A Guarantees

c. 171, § 31A. Guarantees Section 31A. A credit union may execute and deliver for a member such guarantees as may be incidental or usual in the transfer of investment securities.

M.G.L. c. 171, § 32 Term share or deposit accounts; written plan

c. 171, § 32. Term share or deposit accounts; written plan Section 32. A share or deposit authorized by section 30 may, if the directors of the credit union so determine, be received as a term share or deposit, subject to this section. Notwithstanding any prior provisions of the law to the contrary, any such shares or deposits shall be received by a credit union subject to the terms of a written plan, which plan shall specify (a) the proposed rates of dividends or interest to be paid on such term shares or deposits, including day-to-day dividends or interest if the plan so provides, (b) the minimum amount, if any, and the maximum amount of share or deposit balances and the minimum period, which shall not be less than three months, of maintenance of such balances to which such specified rates shall apply, (c) the additional reserves to be established for such rates of dividends, (d) the form and substance of the certificate or passbook which shall represent the shares or deposits to which such dividends or interest may apply, (e) such other provisions as are termed necessary or advisable to give effect to the purposes of such plan and (f), that any credit union shall mail to the depositor a written notification of maturity at least thirty days prior to the date of maturity of said shares or deposit but in no event more than forty-five days prior to said date of maturity of said shares or deposit.

M.G.L. c. 171, § 32A Acceptance of funeral trust account

c. 171, § 32A. Acceptance of funeral trust account Section 32A. Notwithstanding any general or special law to the contrary, a credit union may accept a funeral trust account, as defined in regulations promulgated by the board of registration in embalming and funeral directing.

M.G.L. c. 171, § 32B Demand deposit account and savings account; joint accounts; terms; fees; notice of availability

c. 171, § 32B. Demand deposit account and savings account; joint accounts; terms; fees; notice of availability Section 32B. A natural person not more than 18 years of age or not less than 65 years of age may choose 1 demand deposit account and 1 savings account upon which no service, maintenance or other similar charge shall be imposed; provided, however, that any such demand deposit account and any such savings account shall each include a joint account in which the spouse of the eligible depositor, if applicable and regardless of age, is the joint tenant therein or the joint tenant would otherwise be an eligible depositor and that has been established and used for personal, family or household purposes. Such account shall not be subject to: (i) a minimum balance requirement; (ii) a charge for a deposit or withdrawal; or (iii) a fee for the initial order or subsequent refills of the basic line of checks offered by the credit union, which shall include the name of the depositor. A savings account in trust for another person shall be covered by the notice, services, fee and charge provisions of this section only if the trustee is a person not more than 18 years of age or not less than 65 years of age. To obtain a demand deposit account and a savings account under this section, a consumer shall notify a credit union of the consumer's eligibility for such accounts and provide proof of age in a form acceptable to the credit union. A credit union may assess a fee against an account under this section for certain services in accordance with the credit union's published service charge schedule, which shall include stop payment orders, wire transfers, certified or bank checks, money orders, deposit items returned, transactions at electronic branches and through other electronic devices and a reasonable charge, as determined by the commissioner, against any such account when payment on a check or other transaction on the account has been refused because of insufficient funds or paid despite insufficient funds. A credit union shall post in each of its credit union offices a notice informing consumers of the availability of the credit union services under this section and shall disclose annually to all depositors, in a manner of its choosing, the provisions of this section. For the purposes of this section, the term ''check or other transaction'' shall include, but not be limited to: (i) a check, as defined in 12 U.S.C. 5002; (ii) an electronic fund transfer, as defined in section 1 of chapter 167B; or (iii) a transaction processed by an automated clearinghouse.

M.G.L. c. 171, § 35 Trustee or custodian; profit-sharing or retirement plans

c. 171, § 35. Trustee or custodian; profit-sharing or retirement plans Section 35. A credit union may act as trustee or custodian under a profit-sharing plan instituted by a person, partnership or corporation within the meaning of section 401(a) of the Internal Revenue Code of 1954 including the provisions of P.L. 94–455. A credit union may act as trustee or custodian under a retirement plan or individual retirement account which, in the judgment of such credit union at the time of appointment as such trustee or custodian is accepted, is established pursuant to the provisions of Public Law 87–792, entitled ''Self–Employed Individuals' Tax Retirement Act of 1962'' or pursuant to the provisions of section 2002 of P.L. 93–406 of the Employees Retirement Income Security Act of 1974, if the provisions of such plan have been approved by the commissioner and if such provisions permit any of the funds of the trust or the custodial accounts to be invested in shares or deposits of the credit union. Such shares or deposits may be in addition to the shares or deposits permitted by section thirty. No funds held by such credit union as such trustee or custodian shall be invested otherwise than in shares or deposits in the credit union or properly qualified life insurance retirement income policies or other investments legal for credit unions or any combination thereof, as each such plan may prescribe or permit. Every advertisement, announcement or solicitation for such a plan or account shall state, in a clear and conspicuous manner, the amounts of any contributions and earnings thereon subject to state and federal taxable income.

M.G.L. c. 171, § 36 Designation of beneficiary; deferred compensation or retirement plans

c. 171, § 36. Designation of beneficiary; deferred compensation or retirement plans Section 36. Any designation of any beneficiary in connection with and as provided by an instrument intended to establish a pension, profit-sharing or other deferred compensation or retirement plan, trust or custodial account described in one or more of the following sections of the Internal Revenue Code of the United States, and in effect from time to time, shall be effective according to its terms, notwithstanding any purported testamentary disposition allowed by statute, by operation of law or otherwise to the contrary; section four hundred and one (a), section four hundred and one (f), section four hundred and three (b)(7), section four hundred and five (a), section four hundred and eight (a), and section four hundred and eight (h). Nothing in this section is intended to limit, by implication or otherwise, any nonstatutory right of an employee to designate one or more beneficiaries in the employees' interest under any retirement plan not described in this section or under any other employee benefit plan.

M.G.L. c. 171, § 37 Plans providing loans guaranteed by Higher Education Assistance Corporation

c. 171, § 37. Plans providing loans guaranteed by Higher Education Assistance Corporation Section 37. A credit union may receive shares or deposits, under the terms of a written plan approved by the commissioner, from any labor union, association, trust, public utility, partnership, corporation, college, university, insurance company, charity, any city, town, county or district of the commonwealth or by any instrumentality thereof or individual for the sole purpose of making loans guaranteed in whole or in part by the Massachusetts Higher Education Assistance Corporation; provided, however, that no such plan shall discriminate against any applicant otherwise eligible for such a loan; and, provided further, that such deposits shall not exceed twenty percent of the assets of the credit union.

M.G.L. c. 171, § 38 Accounts for holding residential lease security deposits

c. 171, § 38. Accounts for holding residential lease security deposits Section 38. Any credit union may establish an account to receive deposits from a lessor acting as a trustee for funds received and held by such trustee pursuant to paragraph (a) of subsection (3) of section fifteen B of chapter one hundred and eighty-six. Such account may be established as required by said section fifteen B for the purpose of holding security deposits taken by a lessor of residential dwelling units owned or managed by said lessor, but the terms of said account shall be such as to place said deposit beyond the claim of a creditor of the lessor, including a foreclosing mortgagee or trustee in bankruptcy, and as will provide for the transfer of said deposit to a subsequent owner of any property for which such security deposit was taken. Interest or dividends accruing on said deposit shall be paid to the lessor pursuant to the terms of the deposit. Withdrawals and payments made by the corporation from said account shall discharge the liability of said corporation to all persons.

M.G.L. c. 171, § 39 Joint accounts

c. 171, § 39. Joint accounts Section 39. Shares and deposits may be received and held in the name of a member with one or more persons as joint tenants, payable to such member or his survivors, and any part or all of the shares or deposits and dividends or interest represented by joint accounts may be withdrawn, assigned or transferred by any of the individual parties. Payment to any of the parties to a joint account while all of them are living shall discharge the liability of the corporation to all parties and in the event of the death of any of them the corporation shall be liable only to the survivors, and the payment to any of the survivors shall discharge the liability of the corporation to all parties. No person holding an account as a joint tenant with a member as provided herein and who is not a member or is not otherwise eligible for membership shall be deemed a member for any other provision of this chapter. The surviving owner or owners of a joint account may maintain the balance of the account in the amount appearing at the time of the decease of a joint owner, and such credit union may allow dividend or interest additions and accumulations thereon. Such shares or deposits or any part thereof, or any interest dividends thereon, may be paid to any such person or to any assignee or pledgee of any of such persons whether the other such persons be living or not, provided they are not then attached at law or in equity in a suit against any such person and the credit union then has no notice in writing of any assignment or pledge of the account by any of such persons to any person other than the person to whom payment is being made hereunder. All such payments shall be valid. A surviving owner of a joint account may continue credit union membership if the surviving owner is eligible for membership and meets all requirements in the by-laws.

M.G.L. c. 171, § 40 Trust accounts

c. 171, § 40. Trust accounts Section 40. Subject to the foregoing limitations in respect to shares and deposits and requirements relative to notice, shares may be subscribed for and deposits may be accepted in the name of one or two persons in trust for another provided the name and residence of the beneficiary is disclosed, and such shares and deposits shall be carried in the name of the shareholder or depositor as trustee or trustees. Payments may be made to the trustee, and if there are two trustees, payments may be made to both or to either or to the survivor. If no other notice of existence and terms of a trust has been received in writing by the credit union, upon the death of the trustee or if there are two trustees then upon the death of both, the amount then on deposit together with the dividends thereon may be paid to the person for whom such deposit was made or to his legal representative. Withdrawals and payments made as provided in this section shall fully discharge the liability of the credit union to all persons.

M.G.L. c. 171, § 41 Minors' accounts

c. 171, § 41. Minors' accounts Section 41. Shares may be issued and deposits received in the name of a minor, and such shares and deposits may, subject to the policy of the credit union, be withdrawn by such minor or by his parent or guardian and, in either case, payment made on such withdrawals shall be valid and shall release the corporation from liability to the such minor, parent or guardian relative to such shares and deposits.

M.G.L. c. 171, § 41A Assessment of fees and charges

c. 171, § 41A. Assessment of fees and charges Section 41A. No credit union shall assess any fee, charge or other assessment against any account, established for personal, family or household purposes, of a depositor or shareholder who, as the payee of a check, draft or money order, of which the payee is not also the maker, deposits the same therein and payment on any such instrument is refused by the depository institution upon which it is drawn because of insufficient funds or because the maker thereof did not have an account at such depository institution; provided, however, that a credit union may assess a reasonable fee, charge or assessment that represents its direct costs, as established annually by the commissioner of banks, incurred for processing such check, draft or money order.

M.G.L. c. 171, § 42 Deceased depositors and shareholders

c. 171, § 42. Deceased depositors and shareholders Section 42. Deposits or shares standing in the individual name of a deceased depositor or shareholder shall, except as otherwise provided in this chapter, be paid to his legal representative; but if the total of the deposits and shares does not exceed $10,000 and there has been no demand for payment from a duly appointed executor or administrator, payment may be made at the discretion of a duly authorized officer of the corporation, after the expiration of 30 days from the death of the depositor or shareholder, to the surviving spouse of the deceased depositor or if there be no surviving spouse, to the next of kin of the deceased, upon presentation of a copy of the decedent's death certificate and the surrender of the passbook or other instrument, if any, evidencing the deposits or shares. Payments made as provided in this section shall discharge the liability of the corporation to all persons to the extent of such payments.

M.G.L. c. 171, § 43 Withdrawal of shares or deposits; notice

c. 171, § 43. Withdrawal of shares or deposits; notice Section 43. A credit union may require from a shareholder or depositor ninety days' notice of his intention to withdraw any or all of his shares and sixty days' notice of his intention to withdraw any or all of his deposits.

M.G.L. c. 171, § 46 Lost, stolen or destroyed passbooks; application for payment or issuance of duplicate

c. 171, § 46. Lost, stolen or destroyed passbooks; application for payment or issuance of duplicate Section 46. When a passbook or other instrument as evidence of a shareholder's or a depositor's account issued by any credit union has been lost, stolen or destroyed, the person in whose name it was issued, or in the case of a joint account, by the joint owners thereof may make written application to such credit union for payment of the amount of the shares or deposit represented by said book or other instrument or for issuance of a duplicate book or other instrument therefor. The application shall include an affidavit signed and sworn to that the person making such application is a lawful owner of such passbook or other instrument, that such passbook or other instrument has been lost, stolen or destroyed, and that no lawful owner has, in any way, transferred, pledged or assigned said passbook or other instrument or any interest in the deposits or shares therein. The application shall further include an agreement, in writing, to indemnify the credit union from and against any and all claims, expenses and liabilities in any way resulting from the credit union action on the application by the payment of amounts due on said passbook or other instrument or by the issuance of a duplicate book or other instrument therefor. All signatures contained with such application shall be duly notarized. Upon receipt of such application, the credit union may pay the amount due on said passbook or other instrument or may issue a duplicate book or other instrument therefor. The provisions of this section shall apply to passbooks and other instruments issued by a credit union which subsequently has merged in, consolidated with or transferred its deposit or share liabilities to another bank or credit union. When payment is made or a duplicate book or other instrument is issued in accordance with this section and after presentation of reasonable identification, a credit union shall not be liable to any person on account of its action on the application, payments of the amount due on said passbook or other instrument or issuance of a duplicate book or other instrument therefor, except that a credit union may be liable to a transferee, pledgee or assignee who, prior to such action, payment or issuance, has given the credit union written notice of the transfer, pledge or assignment.

M.G.L. c. 171, § 47 Agreements exculpating credit union for wrongful payment of account

c. 171, § 47. Agreements exculpating credit union for wrongful payment of account Section 47. Any agreement between a depositor or shareholder and any credit union which exculpates such credit union when an account, or any part thereof, is paid by such credit union to a person unlawfully presenting a passbook, or other instrument as evidence of such account is hereby declared to be contrary to public policy and void.

M.G.L. c. 171, § 48 Proceeding for collection of indebtedness; set off

c. 171, § 48. Proceeding for collection of indebtedness; set off Section 48. A person indebted to a credit union may, when proceeded against for the collection of such indebtedness or for the enforcement of any security therefor, set off or recoup the amount of a deposit or shares in such credit union held and owned by him at the time of the commencement of such proceeding; provided, however, that if a proceeding in equity has been commenced to restrain the credit union from doing its actual business or if possession of such credit union has been taken over by the commissioner as provided in section twenty-two of chapter one hundred and sixty-seven or as otherwise provided by law, no shares or a deposit shall be so set off or recouped by any such person unless held and owned by him on the date of the commencement of such proceeding or of possession so taken, and the right of set off or recoupment shall be determined as of such date whether the indebtedness of the depositor or shareholder or the shares or the deposit, is then due or payable or becomes due or payable at a later date. Any indebtedness against which shares or a deposit is permitted to be set off or recouped as aforesaid may be secured or unsecured. Section three of chapter two hundred and thirty-two shall not apply to a set off hereunder, except that any party to a joint account may set off the joint deposit against his individual debt to such credit union. Notwithstanding the foregoing, a judgment shall not be rendered against such credit union in favor of the defendant for any balance found due from it if a proceeding in equity has been commenced against the credit union or possession thereof has been taken as aforesaid. The word ''deposit'', as used in this section, shall include interest due thereon and the word ''shares'', shall include dividends thereon.

M.G.L. c. 171, § 49 Transfer of funds to reduce debt; notification

c. 171, § 49. Transfer of funds to reduce debt; notification Section 49. Whenever a credit union, as a consequence of a default of a debt owed to said credit union by a depositor or shareholder, makes a transfer of funds of such depositor or shareholder to reduce or extinguish said debt, such depositor or shareholder shall be notified forthwith of such transfer by written notice sent by first class mail or electronic mail, directed to his last known address; provided, however, that if the debt is the result of consumer credit granted under the federal Truth in Lending Act, 15 U.S.C. 1601 et. seq., any required notice shall be made in compliance with the federal law and the regulations promulgated thereunder. A depositor or shareholder to whom such notice has not been sent shall be entitled to recover the amount of any actual damages.

M.G.L. c. 171, § 50 Shares or accounts pledged as security; transfer, assignment or credit at foreclosure

c. 171, § 50. Shares or accounts pledged as security; transfer, assignment or credit at foreclosure Section 50. In the event that any shares or accounts which are pledged as security for any loan are sold, forfeited, transferred, assigned or credited for the non-performance of the conditions of such loan or on the foreclosure thereof or for any other lawful purpose, a duly authorized officer of the corporation shall have full authority to transfer, assign or credit such shares or accounts to the bank or purchaser at any foreclosure or other sale to any assignee.

M.G.L. c. 171, § 51 Adverse claims to shares or deposits; process; bond

c. 171, § 51. Adverse claims to shares or deposits; process; bond Section 51. No credit union shall be required to recognize an adverse claim to shares or a deposit standing on its books to the credit of or for the account of any person, except by virtue of the service upon it of appropriate process issued by a court of competent jurisdiction in a suit or action to which such person, or his executors or administrators, has been made a party, unless the adverse claimant gives bond satisfactory to the credit union and the adverse claimant to hold harmless and indemnify it from any liability, loss, damage, costs and expenses whatsoever on account of such adverse claim, or files with the credit union an affidavit setting forth facts showing a reasonable cause for belief that a fiduciary relationship exists between such person and said adverse claimant and that such person is about to misappropriate the deposit or shares in question.

M.G.L. c. 171, § 52 Reduction of accounts for equitable division of loss

c. 171, § 52. Reduction of accounts for equitable division of loss Section 52. The supreme judicial court or any justice thereof sitting in equity may, on petition of a credit union or the board of the credit union, approved by the commissioner, approve or order a reduction of the account of each shareholder or depositor therein whenever the value of its assets is less than the total amount of its shares and deposits so as to divide the loss equitably among such shareholders and depositors. If thereafter the credit union shall realize from such assets a greater sum than was fixed by such order of reduction, such excess shall be divided among the shareholders and depositors whose accounts have been reduced but only to the extent of such reduction; provided, however, that at any time after the entry of a decree approving or ordering such a reduction of accounts, such court or any justice thereof may, by order, finally determine the amount which such shareholders and depositors are equitably entitled to receive in full settlement of their accounts and the manner of distribution of such amount.

M.G.L. c. 171, § 53 Disclosure to account holders of availability of funds

c. 171, § 53. Disclosure to account holders of availability of funds Section 53. For the purposes of this section, the following terms shall have the following meanings:— ''Account'', a (i) share, share certificate or share draft account of a member of a credit union or a nonmember served by a credit union serving predominantly low-income members, as defined by the board of the credit union, of a type approved by the board of the credit union that evidences money or its equivalent received or held by a credit union in the usual course of business and for which it has given or is obligated to give credit to the account of such member or such nonmember; (ii) share, share certificate or share draft account of a nonmember credit union and a nonmember unit of federal, state or local government and political subdivisions thereof; or (iii) custodial account established for loans sold in whole or in part; provided, however, that for the purposes of insured state credit unions, ''share, share certificate or share draft account'' shall include, as determined by the board of the credit union, the equivalent of such accounts under state law. ''Local originating depository institution'', any originating depository institution located in the commonwealth. Each credit union shall disclose to account holders its policy relative to the time period between the deposit of funds by means of a check, negotiable order of withdrawal or money order and the availability of such deposit for withdrawal or use as of right. Except as provided herein, such disclosure and relative availability requirements shall be in accordance with the provisions of the Expedited Funds Availability Act, 12 USC 4001 et seq. and regulations promulgated thereunder.

M.G.L. c. 171, § 54 to 56 Repealed, 2020, 338, Sec. 54

M.G.L. c. 171, § 57 Loans to members; applications; preferences; limitations

c. 171, § 57. Loans to members; applications; preferences; limitations Section 57. The capital, deposits and surplus of a credit union shall be invested in loans to members, with approval of the credit committee, as provided in section seventeen and, when so required herein, of the board of directors. All applications for loans shall be made in writing or by electronic means. Personal loans shall always be given the preference and, in the event there are not sufficient funds available to satisfy all loan applications approved by the credit committee, preference shall be given to the smaller loan. Whenever the liquidity reserve required by section seventy-one falls below five percent of the total assets of a credit union, no further loans shall be made until the ratio as herein provided has been reestablished.

M.G.L. c. 171, § 58 Liabilities of members; limitations

c. 171, § 58. Liabilities of members; limitations Section 58. The total liabilities to a credit union of a member for money borrowed under this chapter shall not at any one time exceed twenty percent of the sum of loan reserve, investment reserve, undivided earnings and any other surplus accounts of such credit union or ten thousand dollars, whichever is greater, plus an amount equal to said member's shares and deposits, if any, pledged to secure an obligation. The total liabilities to any credit union of an organization member and the total liabilities of more than one such member, the majority interest of which is owned or controlled, directly or indirectly, by the same person or persons, fraternal organizations, voluntary associations, partnerships or corporations, for money borrowed pursuant to the provisions of section sixty-five, including in the liabilities of a partnership or company not incorporated the liabilities of the several members thereof, shall not at any one time exceed the total liability of a shareholder or depositor as authorized by said section sixty-five. In computing the total liability of a member hereunder, there shall be included the direct liability of the member and his liability as endorser, guarantor or surety on the obligation of others which are held by the credit union; provided, however, there shall be excluded from such computation the amount of any mortgage loan secured by a first lien on real estate improved with a dwelling to be occupied by not more than four families and occupied or to be occupied, in whole or in part, by such member. The members at each annual meeting shall fix the maximum amount to be loaned to any one member.

M.G.L. c. 171, § 59 to 62 Repealed, 2020, 338, Sec. 56

M.G.L. c. 171, § 63 Education loans

c. 171, § 63. Education loans Section 63. A credit union may make loans to aid and assist students to fulfill a program of higher education as provided herein. Any student who has not attained the age of eighteen and has been admitted to an institution of higher learning or attends such an institution shall have full legal capacity to act in his own behalf in the matter of contracts and other transactions with respect to financing his education under any federal, state or private financing plan, and with respect to such acts done by any such student, he shall have the rights, powers and privileges and be subject to the obligations of persons of full age. A credit union may make loans to aid and assist students to fulfill a program of higher education if such loans are guaranteed in whole or in part by the Massachusetts Higher Education Assistance Corporation as follows: 1. A student shall be eligible for a loan in a credit union if a member of his family is a member of the credit union. 2. The provisions of section fifty-nine shall not be applicable to loans made under this section. Subject to such regulations as the commissioner may deem necessary, a credit union may make and acquire such loans and advances of credit to qualified students as are insured by the federal commissioner of education under Part B of Title IV of the Higher Education Act of 1965 (Public Law 89–329), and may obtain and receive such insurance, commitments for such loans, lines of credit and certificates of individual or comprehensive insurance coverage for such loans, as are provided by said act and may pay the premiums for such insurance fixed by the federal commissioner of education pursuant to said act and may receive payments of interest and principal on such loans pursuant to said act and regulations made thereunder.

M.G.L. c. 171, § 64 Repealed, 2020, 338, Sec. 56

M.G.L. c. 171, § 65 Definitions applicable to Secs. 65 to 65E

c. 171, § 65. Definitions applicable to Secs. 65 to 65E Section 65. As used in sections 65 to 65E, inclusive, the following words shall, unless the context otherwise requires, have the following meanings:— ''Commissioner'', the commissioner of banks. ''Loan'', a loan or line of credit, whether secured by collateral or security of any nature or unsecured, for consumer or other purposes other than a real estate loan. ''Real estate'', land or property, including improved land with a dwelling, owner occupied or unoccupied dwellings, unimproved land, farmland, a unit of a condominium, shares of stock issued by a co-operative housing corporation, leasehold interests under a lease which does not expire for at least 5 years beyond the maturity date of the loan, leasehold interests created in air rights over land, and any other interest in land. ''Mortgage loan'', a loan, line of credit, or borrowing secured primarily by a lien on an interest in real estate, with the exception of a loan described in subsection (c) of section 65A. ''Non-recourse reverse mortgage loan'', a reverse mortgage loan which limits the lender's recovery solely to the value of the property at the time the loan becomes due and payable.

M.G.L. c. 171, § 65A Mortgage loans by credit unions authorized; types; comprehensive written loan policies

c. 171, § 65A. Mortgage loans by credit unions authorized; types; comprehensive written loan policies Section 65A. (a) Credit unions may make or acquire loans and mortgage loans as specified in sections 65 to 65E, inclusive. A credit union may also subsequently revise or modify any terms or conditions of such loans subject to agreement of the parties. (b) The following categories of mortgage loans are specifically authorized: (1) residential mortgage loans secured by a first mortgage lien on a dwelling with 4 or less separate households and occupied or to be occupied by the borrower; (2) residential mortgage loans secured by a subordinate mortgage lien on a dwelling with 4 or less separate households and occupied, or to be occupied, by the borrower including home improvement loans, home equity lines of credit and second mortgage loans; (3) mortgage loans secured by a lien on real estate held or used for investment, governmental, non-profit or other purposes; (4) land loans; (5) construction loans to improve real estate with improvements, structures or projects for residential, investment, governmental or non-profit use and purposes related or incident thereto, including infrastructure or development; and (6) mortgage loans secured by a lien on real estate saleable in the secondary market or underwritten in accordance with mortgage loan programs of public instrumentalities created by the commonwealth or the federal government for the purpose of financing and expanding the supply of residence mortgages or affordable housing. (c) Loans for which a lien on or interest in real estate is taken as additional collateral through an abundance of caution, including loans pursuant to which the credit union takes a blanket lien on all or substantially all of the assets of the borrower, and the value of the real estate is low relative to the aggregate value of all collateral, shall not be considered a ''mortgage loan'' as defined in section 65 but shall be a ''loan'' as defined in said section 65. (d) Extensions of credit under subsections (a) to (c), inclusive, may contain any such agreed to terms and conditions including, but not limited to, those governing the payment of principal and interest, collateral, maximum loan-to-value ratios, maximum debt-to-income ratios, aggregate amounts, amortization, prepayment, loan servicing and the apportionment of taxes, betterment assessments and insurance of any kind applicable to the loan, subject to any limitations imposed by this chapter or other provisions of law. A credit union also may subsequently revise or modify any such terms or conditions subject to agreement of the parties. (e) Notwithstanding subsections (a) to (d), inclusive, reverse mortgage loans and adjustable rate mortgage loans on owner occupied dwellings shall be subject to sections 65C and 65D. (f) The commissioner may, by directive, guideline or regulation, carry out the purposes of sections 65A to 65E, inclusive, and to further define the terms in said sections 65A to 65E, inclusive, to promote safe and sound banking practices. (g) Each credit union shall adopt and maintain comprehensive written loan policies that establish appropriate limits and standards for extensions of credit made pursuant to sections 65 to 65E, inclusive, that are consistent with safe and sound banking practices and are appropriate to the size, nature and scope of the credit union's operations. (h) Such loan policies shall establish prudent loan underwriting standards that clearly and measurably address, at a minimum: (1) maximum loan-to-value, loan amount, aggregate amounts, loan maturities, and debt-to-income requirements; (2) collateral and appraisal requirements; (3) application and loan approval requirements; and (4) loan administration procedures. (i) Such written loan policies shall be reviewed and approved annually by the credit union's board of directors. The commissioner may by directive, guideline or regulation, establish additional minimum safe and sound lending requirements.

M.G.L. c. 171, § 65A1/2 Mortgage loans participation

c. 171, § 65A1/2. Mortgage loans participation Section 65A1/2. (a) A credit union may make, acquire, buy or sell, in whole or in part, mortgage loans on property located in the commonwealth, Connecticut, Maine, New Hampshire, New York, Rhode Island or Vermont as participation loans with a bank, credit union service organization, federally-chartered or federally-insured credit union or financial institution, insurance company or any state or federal government agency or a subdivision thereof. (b) For any mortgage loan participation in which the credit union is originating the loan to the borrower, the borrower shall be a member of the credit union and the loan shall be made in accordance with this chapter. (c) A credit union may enter into a mortgage loan participation on a loan originated by a bank, credit union service organization, federally-chartered or federally-insured credit union or financial institution, insurance company or any state or federal government agency or a subdivision thereof and issued to a borrower; provided, however, that the loan is a type of loan that the participating credit union may make under the participating credit union's board-approved policies. Section 66 shall not apply to loans under this subsection. (d) A credit union may service any mortgage loan participation.

M.G.L. c. 171, § 65B Inspection of real estate securing loan upon default; appraisal of real estate upon excessive loan

c. 171, § 65B. Inspection of real estate securing loan upon default; appraisal of real estate upon excessive loan Section 65B. (a) A credit union shall inspect the real estate securing a loan in the event that a payment of interest or principal upon the loan or on account of real estate taxes upon the parcel mortgaged to secure the same shall be in default. Inspection for the purpose aforesaid shall be made within 91 days from the date of such default in payment of interest or principal or within 181 days from the date of such default in payment on account of taxes, as the case may be, and thereafter periodic inspection shall continue in accordance with this section until such loan shall no longer be in default. (b) The commissioner may cause an appraisal of real estate to be made at the expense of the credit union whenever the commissioner deems an excessive loan has been made or is about to be made upon real estate.

M.G.L. c. 171, § 65C Reverse mortgages; disbursement of proceeds; program requirements; written materials provided to borrower; counseling program; priority of liens

c. 171, § 65C. Reverse mortgages; disbursement of proceeds; program requirements; written materials provided to borrower; counseling program; priority of liens Section 65C. (a) A credit union may make or acquire a reverse mortgage loan, pursuant to any program for reverse mortgage loans which has been submitted to and approved by the commissioner, to the owner of real estate improved with a dwelling designed to be occupied by not more than 4 families. Each owner shall be at least 60 years of age and shall occupy the mortgaged real estate, in whole or in part. A person shall be deemed to be the owner of real estate notwithstanding that legal title thereto is held in the name of a trust if such person is the beneficiary of such trust. (b) For the purposes of sections 65 to 65E, inclusive, a reverse mortgage loan shall not be considered a residential mortgage transaction, as defined in section 1 of chapter 140D or any other transaction specified in subsection (e) of section 10 of said chapter 140D. The notices and rights contained herein shall be in addition to the disclosure and rights provided in said chapter 140D, including the right of rescission in said section 10 of said chapter 140D. (c) The proceeds from a reverse mortgage loan shall be disbursed to the borrower, pursuant to such program, and together with unpaid interest, if any, shall become due and payable: (1) at the end of a fixed term, if any; (2) upon the death of the borrower; (3) upon the conveyance of title to the mortgaged real estate; (4) upon such borrower ceasing to occupy such real estate as a principal dwelling; or (5) upon default by the borrower in the performance of his obligations under the loan agreement. (d) The commissioner shall not approve any program for reverse mortgage loans which does not include the following: (1) the type of loan, whether open-end or closed and whether a recourse or non-recourse loan; (2) an applicant for the loan shall not be bound for 7 days after his acceptance, in writing, of the lender's written commitment to make the loan; (3) the credit union shall obtain a written statement signed by the borrower acknowledging receipt of disclosure of all contractual contingencies which could force a sale of the mortgaged real estate; (4) a provision permitting prepayment of the loan without penalty at any time before the loan becomes due and payable; (5) the interest rate, which may be fixed or variable, and the method of calculation thereof, shall be established at loan origination quote and, at the option of the borrower, may be contingent on the value of the mortgaged real estate at closing or at maturity or on changes in said value during the period between closing and maturity; (6) the method of disbursement of the proceeds of the loan to the borrower; but, at the request of the borrower, disbursement may be made to a third party pursuant to the terms of the loan agreement; (7) a copy of the form of the note and mortgage deed that will be utilized for the loan; (8) a detailed description of how the plan will function; and (9) such other information as the commissioner may require. (e) Before making the loan, a credit union shall provide a prospective borrower with written materials explaining in plain language, the type of mortgage being offered and its specific terms, including but not limited to: (1) a schedule, if applicable, and explanation of payments to the borrower pursuant to the terms of the mortgage agreement and whether or not property taxes and insurance premiums are to be deducted; (2) a schedule of outstanding debt over time, if applicable; (3) repayment date, if a fixed term loan, and other provisions which cause the loan to become due and payable; (4) method of repayment and schedule, if any; (5) all contractual contingencies, including lack of home maintenance and other default provisions which may result in a forced sale of the mortgaged property; (6) interest rate and annual percentage rate, and for a reverse mortgage loan for a specified term, total interest payable thereon; (7) loan fees and charges; (8) description of prepayment and, if applicable, refinancing features; and (9) inclusion of a statement that any such mortgage has tax and estate planning consequences and may affect levels of, or eligibility for, certain government benefits, grants or pensions, and that applicants are advised to explore such matters with appropriate authorities. (f) A credit union shall not make a reverse mortgage loan as provided in this section until it has received a notice, in writing, that the prospective borrower has completed a reverse mortgage counseling program which has been approved by the executive office of aging and independence and which shall include instruction on reverse mortgage loans. The counseling program shall include, but not be limited to, the subject matters contained in clauses (1) to (9), inclusive, of subsection (d), relative to all reverse mortgage loan programs approved by the commissioner pursuant to this section. For the purpose of providing such counseling, the executive office of aging and independence shall establish and maintain a list of counseling programs approved by it and shall make such list available to all credit unions and to the public. (g) A reverse mortgage loan shall constitute a lien against the property securing the loan to the extent of all advances made pursuant to the reverse mortgage and all interest accrued on such advances, and the lien shall have priority over any lien filed or recorded after recordation of a reverse mortgage loan. The commissioner may adopt regulations necessary to carry out this section. (h) Sections 96 to 114A, inclusive, of chapter 140 shall not apply to a reverse mortgage loan.

M.G.L. c. 171, § 65C1/2 Reverse mortgage loan requirements

c. 171, § 65C1/2. Reverse mortgage loan requirements Section 65C1/2. (a) As used in this section the following word shall, unless the context clearly requires otherwise, have the following meaning: ''Mortgagor'', an applicant for a reverse mortgage who: (1) has a gross income of less than 50 per cent of the area median income, as periodically determined by the United States Department of Housing and Urban Development; and (2) possesses assets, excluding a primary residence, valued at less than $120,000. (b) No mortgagee shall make a reverse mortgage loan pursuant to section 65C to a mortgagor unless: (i) the mortgagor affirmatively opts in writing for the reverse mortgage; and (ii) at or before the closing of any reverse mortgage loan the mortgagee has received written certification from a counselor with a third-party organization that the mortgagor has received counseling in person, by synchronous real-time video conference or by telephone relative to the appropriateness of the loan transaction from the third party organization and has completed an approved counseling program offered by the third party organization; provided, however, that the third party organization shall have been approved by the executive office of aging and independence for purposes of such counseling. (c) A reverse mortgage executed with a borrower that has not received counseling by a third party approved by the executive office of aging and independence shall render the terms of the reverse mortgage unenforceable. The commissioner shall adopt regulations to administer and implement this section.

M.G.L. c. 171, § 65D Mortgage loans which provide for variation in interest rate; conditions; variation in rate of amortization

c. 171, § 65D. Mortgage loans which provide for variation in interest rate; conditions; variation in rate of amortization Section 65D. (a) Any credit union may make or acquire mortgage loans evidenced by a note which provides for variation in the rate of interest over the term of the note, but a loan made to finance or refinance the purchase of and secured by a first lien on a dwelling house of 4 or fewer separate households, occupied in whole or in part by the mortgagor, shall be subject to, but not limited to, the following conditions and restrictions imposed by the commissioner:— (1) the method by which the rate of interest may be adjusted; (2) the frequency with which the rate of interest may be adjusted, but that successive rate adjustments shall be not less than 6 months apart; (3) the maximum increase in the rate of interest allowed for any such adjustment; (4) provisions for decreases in the rate of interest as may be warranted by market conditions; (5) requirements for advance notification and explanation of adjustments in the rate of interest, but the notification and explanation shall occur not less than 30 days before the adjustment; and (6) methods of disclosure to the mortgagor of the terms and conditions of the loan as required under the provisions of chapter 140D. (b) Notwithstanding any general or special law to the contrary, the commissioner may, by further conditions and restrictions, provide that the rate of amortization may be varied, including utilizing a period of negative amortization, in order to adjust the rate of interest.

M.G.L. c. 171, § 65E Powers of credit unions

c. 171, § 65E. Powers of credit unions Section 65E. A credit union shall have the following powers and any further incidental or complementary powers that may fairly be implied from those expressly conferred and such as are reasonably necessary to enable the credit union to exercise fully those powers according to common customs and usages: (i) to discount, buy, invest in, hold, assign, transfer, sell and negotiate promissory notes, drafts, bills of exchange, mortgages, bonds, debentures, bonds or notes secured by mortgages, installment obligations and other evidences of debt; (ii) to advance money or credits on real estate, on improvements thereto or on personal security, on terms to be agreed upon; and (iii) to buy, sell or make loans as participation loans with any other federally-insured credit union, bank or insurance company and to service any loans sold by it. This section shall be applicable to loans and mortgage loans authorized by sections 65A to 65E, inclusive.

M.G.L. c. 171, § 66 Person obligated to make payments under mortgage to be member of credit union

c. 171, § 66. Person obligated to make payments under mortgage to be member of credit union Section 66. Prior to making mortgage loans on real estate pursuant to sections 65 to 65E, inclusive, a credit union shall require a person obligated from time to time to make payments under a mortgage, whether as the original borrower or as a subsequent owner of a mortgaged property, to be or become a member of the credit union.

M.G.L. c. 171, § 67 Investments

c. 171, § 67. Investments Section 67. A credit union may make the following investments: (a) in the shares of the Central Credit Union Fund, Incorporated, as authorized by section three of chapter two hundred and sixteen of the acts of nineteen hundred and thirty-two; (b) in the shares of any federally chartered corporate credit union provided, however, that not more than twenty-five percent of the assets of a credit union shall be invested in such shares; (c) in deposits in savings banks incorporated in the commonwealth; (d) in paid-up shares and accounts of and in cooperative banks incorporated in the commonwealth; (e) in deposits in the Reserve Fund of the Massachusetts Credit Union Share Insurance Corporation authorized by section 8A of chapter 294 of the acts of 1961; (f) in deposits in trust companies incorporated in the commonwealth; (g) in deposits in banking companies incorporated in the commonwealth which are members of the Federal Deposit Insurance Corporation; (h) in the shares of federal savings and loan associations having a usual place of business within the commonwealth to an amount not in excess of the insurance provided by the Federal Savings and Loan Insurance Corporation for a depositor in any one of such association; (i) in deposits in national banks located in the commonwealth; (j) in bonds or notes of the United States or of any state or subdivision thereof; (k) obligations of other federal agencies which appear on the list of legal investments prepared pursuant to section fifteen A of chapter one hundred and sixty-seven; (l) in repurchase agreements secured by government obligations up to one year maturity; (m) in a common trust unit plan organized for the purchase of obligations of the United States or any subdivision thereof which appear on the list of legal investments prepared pursuant to said section fifteen A of said chapter one hundred and sixty-seven and which plan has as its custodian a banking institution authorized to accept deposits from a credit union or from a savings bank; (n) participate in federal funds with those banking corporations which are listed as eligible for such an investment, on the list of legal investments prepared pursuant to said section fifteen A of said chapter one hundred and sixty-seven; (o) in any obligations, bank stocks, bank holding company stocks, insurance stocks or preferred stocks of public utility companies that appear on the list of legal investments prepared pursuant to said section 15A of said chapter 167; provided, however, that: (i) not more than 10 per cent of the assets of a credit union shall be invested in bank stocks, bank holding company stocks, insurance stocks, preferred stocks of public utility companies or in all 4 of such types of stocks appearing on the list and not more than $15,000 or 2 per cent of the assets of a credit union, whichever is greater, shall be invested in the stock of any 1 such bank, bank holding company, insurance company or preferred stock of public utility companies; (ii) not more than 20 per cent of the assets of a credit union shall be invested in railroad obligations appearing on the list and not more than 1.5 per cent of the shares and deposits of any such credit union shall be invested in the obligations of any 1 operating railroad corporation; (iii) not more than 20 per cent of the assets of a credit union shall be invested in the obligations of telephone companies appearing on the list and not more than 4 per cent of the shares and deposits of such credit union shall be invested in the obligations of any 1 such company; (iv) not more than 25 per cent of the assets of a credit union shall be invested in obligations of public utility companies appearing on the list and not more than 4 per cent of the deposits of such credit union shall be invested in the obligations of any 1 such company; and (v) not more than 10 per cent of the assets of a credit union shall be invested in interest bearing obligations authorized for investment under section 15B of said chapter 167 and appearing on the list and not more than 1/2 of 1 per cent of the shares and deposits of such credit union shall be so invested in the obligations of any one obligor, but the foregoing limitations shall not apply to obligations of telephone companies, of companies engaged primarily in the distribution and sale of electricity or gas, or both, or of railroad companies other than terminal companies; (p) in shares of one or more investment funds approved by the commissioner and appearing on the list prepared pursuant to section fifteen A of said chapter one hundred and sixty-seven; provided, however, that not more than five percent of assets of a credit union shall be invested in a single such investment fund, and not more than twenty percent of the assets of a credit union shall be invested, in the aggregate, in such investment funds; (q) in certificates of deposit having a maturity not in excess of two years of a banking corporation; provided, however, that (i) either the banking corporation or a bank holding company as, defined by chapter one hundred and sixty-seven A which owns two-thirds of the outstanding shares of each class of such banking corporation's voting stock has paid, in each of the five years immediately preceding the date of investment dividends, in cash of not less than four percent of its common stock without having reduced the aggregate par value thereof; (ii) the banking corporation has surplus at least equal to fifty percent of its capital stock; (iii) the banking corporation has a combined total of capital stock, surplus, undivided profits, capital debentures and reserve for contingencies at least equal to six percent of its aggregate deposit liability at the end of the calendar year immediately preceding the date of investment; and (iv) the banking corporation is, if its principal office is located outside the commonwealth, a member of the federal reserve system; provided, however, that in the case of a banking corporation having a combined total of capital stock, surplus, undivided profits and reserve for contingencies equal to at least five hundred million dollars, the said combined total may be less than six percent, but not less than five percent, of its aggregate deposit liability at the end of the calendar year immediately preceding the date of investment. The limitations imposed by subclause (i) shall not apply to an aggregate investment of not in excess of one hundred thousand dollars in certificates of deposit of a banking corporation, the deposits of which banking corporation are insured by the Federal Deposit Insurance Corporation; (r) in bankers' acceptances of the kinds and maturities made eligible by law for rediscount with federal reserve banks; provided, however, that the same are accepted by a bank, banking association or trust company incorporated under state or federal law and having its principal place of business within the commonwealth; provided, however, that not more than 10 per cent of the assets of a credit union shall be invested in such bankers' acceptances and not more than 5 per cent of the assets of such credit union shall be invested in the acceptances eligible by law for rediscount in federal reserve banks of any 1 accepting bank or trust company; and provided further, that the aggregate amount of bankers' acceptances of any 1 bank, banking association or trust company held by any such credit union shall not exceed 25 per cent of the paid-up capital and surplus of such bank, banking association or trust company; (s) in bonds of governments or countries friendly to the United States as defined by the United States Department of State; (t) a credit union may contribute such sums as its board of directors may determine to be reasonable (i) to any private nonprofit organization organized for the purpose of improving the social and economic conditions in the community where such credit union is established, including any educational institution, and to any educational institution located outside that community for the purpose of providing scholarships for the benefit of the residents of that community; or (ii) to any fund being raised by a committee or agency for the purpose of relieving suffering or distress resulting from disaster or other calamity occurring in any part of the commonwealth; (u) in the capital stock of the Federal Home Loan Bank of Boston; and (v) notwithstanding the provisions of clause (k), a credit union may invest in mortgage backed securities originated by said credit union when such securities are guaranteed by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. For the purposes of clauses (a) to (i), inclusive, the words ''shares, deposits and accounts'' shall include any such term share, term deposit, certificate of deposit, or term account with a maturity not to exceed three years.

M.G.L. c. 171, § 67A Membership in associations benefitting credit union or providing services

c. 171, § 67A. Membership in associations benefitting credit union or providing services Section 67A. A credit union may, by vote of its board of directors, obtain membership in certain organizations and may make contributions and subscribe for services subject to the conditions and requirements of this section. (1) A credit union may become a member of any association organized to protect and promote the interest of credit unions and may pay for such membership its proportionate share of expenses as is reasonable and necessary. (2) A credit union may become a member of or contribute to any other association or organization in the commonwealth if, in the opinion of its board of directors, such membership or contribution is reasonable and of substantial benefit to such credit union and its members. (3) For the purpose of promoting, protecting or conserving the assets of credit unions, a credit union may subscribe for services, including advertising and professional services, rendered or to be rendered collectively through an association referred to in paragraph (1) or through any group of credit union institutions; and in each such case, the credit union, with the approval of its board of directors, may pay for such services its proportionate share of the total cost thereof or such other amount as the said board shall deem reasonable and proper.

M.G.L. c. 171, § 67B Investment in shares of stock registered on a national securities exchange or for which quotations are available through the financial Industry Regulatory Authority, Inc., or any comparable service; application to commissioner for prudent person authority; due diligence

c. 171, § 67B. Investment in shares of stock registered on a national securities exchange or for which quotations are available through the financial Industry Regulatory Authority, Inc., or any comparable service; application to commissioner for prudent person authority; due diligence Section 67B. Upon a 2/3 vote of its board of directors, a credit union which has strong management, is well-capitalized and has at least a satisfactory rating at the most recent community reinvestment examination conducted by the commissioner pursuant to section 14 of chapter 167 may apply to the commissioner to invest in shares of stock registered on a national securities exchange as provided in the Securities Exchange Act of 1934, 15 U.S.C. 78a, or for which quotations are available through the Financial Industry Regulatory Authority, Inc. or any comparable service designated by the commissioner; provided, however, that the investment shall be made in the exercise of the judgment and care consistent with the prudent person rule as provided in this section. In making the application to the commissioner for prudent person authority, the credit union shall also have adequate policies and procedures governing the performance of the activity by the credit union and its employees to minimize any credit, market, liquidity, operational, legal and reputational risks to the credit union. A credit union shall submit other information the commissioner may consider necessary to properly evaluate an application. The commissioner may consider any other information available to the division of banks in determining whether to approve or reject an application. Approval granted by the commissioner shall be subject to conditions and limitations as the commissioner may impose. A credit union may apply to invest up to 20 per cent of its assets under this section. The percentage of assets authorized shall be determined by the commissioner. The commissioner may increase, modify, curtail, rescind or otherwise limit a credit union's authority to make the investments. Before making any investment under this section, a credit union shall conduct an appropriate level of due diligence to determine if an investment shall be both permissible and appropriate and may include both internal and external analysis. For debt instruments, the analysis shall not rely solely on 1 or more credit rating agencies and the credit union shall determine that the instrument has both a low risk of default by the obligor and that the full and timely repayment shall be expected over the expected life of the investment. A credit union shall take into consideration the following: (i) when considering the purposes, terms and other circumstances of the credit union, including those set forth in this section, whether the investment would meet the prudent person rule where the credit union shall exercise reasonable care, skill and caution in making its investments and management decisions; (ii) whether the investment or management decision shall be consistent with an overall investment strategy reasonably suited to the credit union; (iii) consideration of circumstances relevant to the credit union in investing and managing its assets, including: general economic conditions; the possible effect of inflation or deflation; the role that each investment or course of action plays within the overall credit union investment philosophy; the expected total return from income and the appreciation of capital; other resources of the credit union; needs for liquidity, regularity of income and preservation or appreciation of capital; and an asset's special relationship or special value, if any, to the purposes of the credit union; (iv) whether facts relevant to the investment and management of its assets may be reasonably verified; (v) whether the investment or management decision shall reasonably diversify the investments of the credit union to bring the credit union's portfolio into compliance with the purposes, terms and the other circumstances of the credit union and the requirements of this section; and (vi) the costs of any decision in investing and managing credit union assets and whether the costs shall be appropriate and reasonable in relation to its assets. The investments pursuant to this section shall not exceed 20 per cent of the credit union's assets. The investments shall be subject to annual review by the board of directors of the credit union and shall be subject to periodic review by the division of banks during the course of examinations pursuant to section 2 of chapter 167.

M.G.L. c. 171, § 68 Registration of securities in name of partnership or corporate nominee

c. 171, § 68. Registration of securities in name of partnership or corporate nominee Section 68. Any credit union may cause any stock or security in registered form held for its account and not in a fiduciary capacity to be registered and held in the name of a partnership or corporate nominee named by it and residing or having a principal place of business in the commonwealth; provided, however, that nothing in this section shall be construed as to permit any credit union to deliver any security held for its account into the possession and control of any other person except in accordance with the regulations of the commissioner pursuant to section six of chapter one hundred and sixty-seven. A depository having possession of securities of a credit union registered as authorized by this section shall maintain adequate records indicating the ownership thereof, shall segregate the same from his or its own assets and shall be absolutely liable for any loss occasioned by the acts of a nominee.

M.G.L. c. 171, § 69 Allowance or reserve for loan losses

c. 171, § 69. Allowance or reserve for loan losses Section 69. A credit union shall maintain an allowance for loan losses or reserve for loan losses calculated according to generally accepted accounting principles or as otherwise directed by the commissioner. For the purposes of this chapter, any reference to the term ''loan reserve'' shall mean the allowance for loan losses or the reserve calculated under this section. Should the reserves maintained in this section and section seventy exceed the amount necessary to be kept or maintained in those accounts, the credit union may transfer such excess into an undivided earnings account.

M.G.L. c. 171, § 70 Reserve for losses on investments

c. 171, § 70. Reserve for losses on investments Section 70. A credit union shall maintain a reserve for loses on investments equal to five percent of the difference between the book value and the market value of all investments mentioned in section sixty-seven excluding those investments which are included in the liquidity reserve; provided, however, that a credit union shall maintain a reserve for the stock investments authorized by paragraph (o) and the investment funds authorized by paragraph (p) of section sixty-seven. Should the reserves maintained in this section and section sixty-nine exceed the amount necessary to be kept or maintained in those accounts, the credit union may transfer such excess into an undivided earnings account.

M.G.L. c. 171, § 71 Cash on hand requirements and enumerated investments

c. 171, § 71. Cash on hand requirements and enumerated investments Section 71. At least five percent of the total assets of a credit union shall be carried as cash on hand or in the following investments which shall be the absolute property and shall be under the control of the credit union or be held by book entry procedure when required. Whenever the aforesaid ratio falls below five percent of the total assets of a credit union, no further loans shall be made until the ratio as herein provided has been reestablished. (a) Shares in the Central Credit Union Fund, Inc. (b) Shares in a federally chartered corporate credit union. (c) Deposits in savings banks incorporated in the commonwealth. (d) Paid-up shares and accounts of and in cooperative banks incorporated in the commonwealth. (e) Shares of savings and loan associations incorporated in the commonwealth. (f) Balances due from banks and trust companies or banking companies which are members of the Federal Deposit Insurance Corporation. (g) Shares of federal savings and loan associations having a usual place of business within the commonwealth. (h) Bonds or notes of the United States or of any state or subdivision thereof with a maturity of up to five years. (i) Bonds or notes of other federal agencies which are on the list of legal investments prepared pursuant to section fifteen A of chapter one hundred and sixty-seven with a maturity of up to three years. (j) Repurchase agreements secured by United States government obligations up to one year maturity. (k) In a common trust unit plan organized for the purchase of bonds or notes of the United States or of any subdivision thereof which are on the list of legal investments prepared pursuant to said section fifteen A of said chapter one hundred and sixty-seven and which has as its custodian a banking institution authorized to accept deposits from a credit union or from a savings bank. (l) Securities of the government national mortgage association. (m) Federal funds. (n) In any bonds or notes which are on the list of legal investments prepared pursuant to said section fifteen A of said chapter one hundred and sixty-seven with a maturity of up to three years; provided, however, that such bonds or notes are rated as, A, AA, or AAA. (o) Certificates of deposits of up to one year maturity which otherwise meet the criteria set out in paragraphs (a) to (i), inclusive, or paragraph (q) of section sixty-seven.

M.G.L. c. 171, § 72 Contingent fund; liability on loan upon death of member

c. 171, § 72. Contingent fund; liability on loan upon death of member Section 72. The by-laws of a credit union may provide that upon the death of a member who is a borrower by means of a personal loan upon his note, whether or not there are any endorsers or co-makers thereon, but otherwise unsecured, the liability upon such loan shall cease with respect to the unpaid balance of such loan and any loss thereon may be charged to a contingent fund, which fund shall be created and thereafter maintained by such credit union by contributions from undivided earnings, current earnings or from the borrowers, as determined by the board of directors; provided, however, that the operation of such a provision of the by-laws shall not, in any calendar year, result in charges to the contingent fund in excess of ten percent of the loan reserve, investment reserve, undivided earnings and other surplus accounts in addition to the unexpended balance of contributions by borrowers. Each such charge to the contingent fund shall be reported within ten days thereafter to the commissioner, who may make such orders regarding the operation of the contingent fund as he deems advisable.

M.G.L. c. 171, § 73 Borrowing on behalf of credit union

c. 171, § 73. Borrowing on behalf of credit union Section 73. The board of directors may borrow money for and on behalf of the credit union. The board may, if the credit union has a deposit or share account, borrow money for and on behalf of the credit union from a savings bank, cooperative bank, federal savings and loan association, national bank or trust company, an entity identified by the commissioner or any federally-insured corporate credit union; provided, however, that money borrowed from any such institution shall be in an amount not more than the deposit or share account and shall extend not more than 1 year from the date on which the loan is made.

M.G.L. c. 171, § 74 Sale, transfer and assignment of loans, investments and other assets

c. 171, § 74. Sale, transfer and assignment of loans, investments and other assets Section 74. A credit union by a vote of its directors may sell, transfer and assign any and all of its loans, investments or other assets; provided, however, that (a) where loans are sold with recourse, a loan reserve shall be established consistent with the applicable provisions of section sixty-nine and appropriate explanations shall be recorded on the statement of conditions as the commissioner may prescribe; (b) in any case where the consideration to be received is other than cash, the written approval of the commissioner shall first be obtained; and (c) where the aggregate amount of sales of loans exceeds 20 per cent of the total loans outstanding, the prior written approval of the commissioner shall be obtained for any amount in excess thereof. A credit union may continue to service any loans that it sells and may collect a service charge for such service provided that a formal agreement is effected between both parties. Any such assignment given as security for borrowing shall constitute a debt which shall be satisfied in the event of the liquidation of the affairs of a credit union before any distribution of its assets to shareholders or holders of other accounts.

M.G.L. c. 171, § 75 Investments in fixed assets; investment in other corporations, associations or financial institutions; purchase of insurance covering debtors; checks and money orders; safe deposit vaults

c. 171, § 75. Investments in fixed assets; investment in other corporations, associations or financial institutions; purchase of insurance covering debtors; checks and money orders; safe deposit vaults Section 75. (a) A well capitalized or adequately capitalized credit union, as defined in 12 C.F.R. 702.102, may invest, for the convenient transactions of its business, in the aggregate, in any fixed assets in an amount not to exceed 5 per cent of the credit union's shares and retained earnings without advance regulatory approval. Included in such investments is the purchase, erection or preparation of rental property in a reasonable amount; provided, however, that the rental property is necessary to complete the purchase, erection or preparation; and provided further, that the commissioner may waive these requirements. (b) A credit union may: (i) invest an amount to be approved by the commissioner, subject to any applicable regulations as the commissioner may deem necessary, in a corporation or association formed for the purpose of furnishing statistical or bookkeeping services or information of the kind generally required by a credit union to such credit union or to other credit unions or banks as hereinafter provided; or (ii) invest its shares or deposits, in participation with any other credit union, bank or national banking association, in such corporation or association; provided, however, that section 2 of chapter 167 shall apply to such corporations or associations. Nothing contained herein shall be construed to preclude a credit union from renting or subscribing for the services of such corporations or associations or any other corporation or association rendering such services. (c) A credit union may purchase, by itself or with another credit union or bank, group life insurance on the lives of debtors who request such insurance. The premium for such insurance, or the premium on an individual life insurance policy held to cover the indebtedness, may be added to the payments required of those who elect to become insured. If a debtor so insured dies, the insurance proceeds shall be applied to reduce or extinguish the unpaid indebtedness to the extent of such payment. A director, officer or employee of such credit union shall not benefit financially, directly or indirectly, from the sale of such insurance. (d) A credit union may purchase by itself, or with a group of credit unions or banks, group accident and health insurance covering debtors of such credit union or group of credit unions if the debtors request such insurance. Such insurance shall cover all or part of the indebtedness of such debtors. The premium for such insurance, or the premium on an individual accident and health insurance policy held to cover the indebtedness, may be added to the payments required of any such debtor who elects to become insured. A director, officer or employee of such credit union shall not benefit financially, directly or indirectly, from the sale of such insurance. (e) A credit union may engage directly in the business of selling, issuing or registering checks, traveler's checks or money orders and may cash any check or money order whatsoever and may make charges for any of the foregoing. (f) (1) For the purposes of this subsection, the following terms shall have the following meanings: ''Lessee'', the person in whose name a safe deposit box stands on the books of a credit union; ''Rent'', the amount due to a credit union for the rental or use of a safe deposit box; ''Safe deposit box'', a box or safe in the vault of a credit union. (2) A credit union may establish and maintain safe deposit vaults and rent safe deposit boxes or storage space therein under conditions prescribed by the commissioner. (3) A credit union that leases a safe deposit box for rent shall advise the lessee in writing that insurance coverage for the contents of the safe deposit box is not provided by the credit union but that the lessee may, at the lessee's own expense, insure the contents of the safe deposit box with an insurance company of the lessee's own selection. The commissioner shall establish the rules and regulations necessary to carry out this subsection. (4) If the rent for a safe deposit box has not been paid for 1 year after being due, the credit union may mail, postage prepaid, to the lessee at the lessee's address shown on the credit union's books, a notice stating that if the rent for the safe deposit box is not paid within 60 days from the date of the notice, the credit union may cause the safe deposit box to be opened and the contents to be disposed of in accordance with this subsection. If the lessee fails to pay the rent for the safe deposit box in full to the date of the notice within 60 days from the date of the notice, all rights of the lessee in the safe deposit box and of access to it shall cease. Any time thereafter, the credit union may, in the presence of an officer of the credit union and of a notary public not in the general employ of the credit union, cause the safe deposit box to be opened and the notary public shall: (i) remove the contents of the safe deposit box; (ii) list the contents; and (iii) seal the contents in a package, marking thereon the name of the lessee and the lessee's address as shown on the books of the credit union. An affidavit setting forth the facts concerning the entry and listing the contents of the safe deposit box shall be signed by the officer and the notary public and shall be retained by the credit union. The affidavit shall be prima facie evidence of the facts set forth therein in all proceedings at law and equity wherein evidence of such facts would be admissible. The affidavit shall be in substantially the following form:- COMMONWEALTH OF MASSACHUSETTS County of We, ___ an authorized official of ___ and ___ a notary public not in the general employ of said credit union, hereby certify that on the ___ day ___ (insert year), we were present and witnessed the forcible opening of Safe No. ___ leased in the name of ___ in the vaults of the ___ office of said ___ credit union; that the contents of said safe were removed, examined, listed and then enclosed in a package and sealed in our presence. We further certify that the following is a true and complete list of all the contents removed from said safe. (Allow space here for listing of contents.) ___________________________________________________________________ Signature of officer. Title. ___________________________________________________________________ Name of Credit Union ___________________________________________________________________ Signature of notary public not in the general employ of said credit union. (5) The package containing the contents of any safe deposit box opened as aforesaid shall be retained on special deposit by the credit union subject to payment of rent due for the safe deposit box, all expenses incurred in connection with opening the safe deposit box and charges for the safekeeping of the package. If the package remains unclaimed for 7 years and the amounts due as above provided remain unpaid, the credit union may mail, postage prepaid, to the person to whom, and at the address at which, the notice provided for above was mailed, a notice stating that if such amounts are not be paid within 60 days from the date of such notice, the credit union will turn over the contents, less the rental charge, to the state treasurer as unclaimed and abandoned property, to be held by the state treasurer subject to chapter 200A. The credit union may sell, assign or deliver so much of the contents of the package, at public or private sale, as will enable it to realize such amount as will compensate the credit union for said charges.

M.G.L. c. 171, § 75A Credit union as agent or broker for The Savings Bank Life Insurance Company of Massachusetts

c. 171, § 75A. Credit union as agent or broker for The Savings Bank Life Insurance Company of Massachusetts Section 75A. A credit union may, with the approval of the commissioner, act as agent or broker for The Savings Bank Life Insurance Company of Massachusetts pursuant to section four of chapter one hundred and seventy-eight A.

M.G.L. c. 171, § 75B Definitions; credit union as seller of insurance products; license requirement; officers, tellers and employees; limitations; insurance to secure credit secured by mortgage; waiver of applicability of preempted provisions

c. 171, § 75B. Definitions; credit union as seller of insurance products; license requirement; officers, tellers and employees; limitations; insurance to secure credit secured by mortgage; waiver of applicability of preempted provisions Section 75B. (a) For purposes of this section, the word ''company'' shall mean an insurance company licensed pursuant to chapter 175 and the word ''affiliate'' shall mean a credit union service organization as established pursuant to 12 U.S.C. section 1786a(e)(1) or by section 6A of chapter 171 and by regulations promulgated thereunder by the commissioner. (b) A credit union shall have the power to sell, either directly or indirectly through an affiliate established for the purpose or a third party agreement, and acting either as an agent licensed pursuant to section 163 of chapter 175 or a broker licensed pursuant to section 166 of said chapter 175, insurance products as a company, for which the credit union, affiliate or third party acts as agent or broker, is authorized to issue in the commonwealth. No credit union exercising the power shall assume or guarantee the payment on any premiums on the products or guarantee the truth of any statement contained in the application therefor. The sales shall be conducted in accordance with conditions and limitations that the commissioner shall promulgate by regulation which shall reflect the substance of conditions established by the National Credit Union Administration and other federal regulatory agencies governing the sale of insurance products. The conditions and limitations shall be in addition to and consistent with said chapter 175 and regulations promulgated thereunder by the commissioner of insurance with respect to the licensing of insurance agents and brokers and the sale of insurance products. The conditions and limitations shall include, but not be limited to, the following: (1) No credit union, except a credit union licensed as an agent for the Savings Bank Life Insurance Company of Massachusetts and only to the extent of the authority granted under the license, shall undertake to act directly or indirectly as an insurance agent or broker, in any manner permitted by this section, until the commissioner approves a general plan of operation submitted by the credit union that conforms with the regulations promulgated pursuant to this section. The plan shall include a detailed description of the complaint resolution procedure, including credit union personnel designated for its enforcement, required pursuant to paragraph (9). (2) Officers, tellers and other employees of a credit union who are not licensed as insurance agents may refer a member of the credit union to a licensed insurance agent of the credit union only when the member initiates an inquiry relative to the availability or acquisition of insurance products. No such officer, teller or other employee shall be further or additionally compensated for making the referrals. (3) The solicitation or sale of insurance products shall be permitted at the main office of a credit union, or at any branch thereof established pursuant to chapter 171 or 12 U.S.C. section 1752(9), or at any other credit union office, not including an electronic branch established pursuant to chapter 167B. The solicitation or sale shall be conducted on the premises of a credit union in a distinctly designated area which is separate and apart from any physical setting in which services for insured deposit account transactions or transactions involving applications for the extension of credit are conducted. The commissioner may waive the requirement for the physical separation of credit union and insurance services only upon a demonstration by a credit union that space considerations, such as the size or design of the credit union premises, preclude such separation. The commissioner may allow for such use of a common area for both purposes if, subject to notice and hearing at the commissioner's discretion, the waiver application demonstrates physical constraints that are consistent with criteria the commissioner shall establish for the waivers. In any instance where a waiver is granted, a credit union employee, licensed as an insurance agent, shall not, in any manner involving the application by a member for an extension of credit by the credit union, act as the representative of the credit union both with respect to the application and with respect to the solicitation and sale of insurance products to the member, whether or not the insurance is required for the extension of credit. It shall be the responsibility of a credit union to institute procedures to eliminate member misunderstanding or confusion as to the distinction between insurance products and other credit union functions, and to prevent any misrepresentation thereof. Notwithstanding the foregoing, any premises constructed, purchased, leased or acquired by a credit union on and after the effective date of this section for the conduct of its authorized business, including the solicitation and sale of insurance, shall not be eligible for the waiver provided for herein, unless the acquisition results from a merger or consolidation pursuant to chapter 171. (4) (A) A credit union is hereby prohibited from tying the availability and extension of credit by a credit union to the purchase of insurance products from the credit union. (B) No solicitation for the sale of insurance in conjunction with any application for the extension of credit shall be permitted until the application has been approved, approval and the disclosures required by this section have been provided to the applicant in writing, and the receipt of both the approval and disclosures has been acknowledged in writing by the applicant. The date, time and method of the communication of the approval and disclosures to the applicant, together with the applicant's acknowledgment of the receipt thereof, shall be made a permanent part of the credit union record of the extension of credit. This paragraph shall not apply in situations where a credit union contacts a member in the course of direct or mass marketing of insurance products to a group of persons in a manner that bears no relation to a member's loan application or credit decision. (C) In the instance of an application to a credit union for an extension of credit to be secured by a mortgage on real estate and in which it is necessary for the applicant to obtain a policy insuring said premises against loss and designating the credit union as loss payee, (i) the credit union shall make the initial disclosure of the necessity of insurance in its letter of commitment to the applicant approving the requested extension of credit; (ii) the credit union shall not, in any manner, solicit the applicant member to purchase the required insurance from the credit union until the commitment has been accepted by the applicant member; and (iii) the credit union shall not reject any policy, so long as it satisfies the required insurance, because the policy was issued by a company other than that for which the credit union acts as agent in the sale of insurance products. (5) Rebates shall be regulated pursuant to section 183 of chapter 175. (6) A credit union, through its licensed insurance agents or brokers, shall disclose in writing to a member who is a potential insurance purchaser that: (i) the insurance products which are available are not deposits of the credit union, are not protected by the national credit union share insurance fund or any other type of deposit insurance, are not an obligation of or guaranteed by the credit union, and may be subject to risk; (ii) any insurance required as a condition of the extension of credit by the credit union need not be purchased from the credit union but may, without affecting the approval of the application for an extension of credit, be purchased from an agent or insurance company of the member's choice; and (iii) the member may file any complaints with the office of consumer affairs and business regulations as hereinafter provided. The disclosures required by this section shall be provided in writing, and receipt thereof shall be acknowledged in writing by the member. (7) Credit union member information security and confidentiality shall be regulated pursuant to chapter 175I and the federal Fair Credit Reporting Act. (8) No credit union engaged in the direct sales of insurance products shall discriminate against an applicant member or allow an affiliate established for the purpose or a third party acting on its behalf to discriminate against an applicant for any insurance products offered by it based upon the race, color, national origin or residence of the applicant, or on such other basis as the commissioner may determine. No credit union offering insurance products at its main office or any branch thereof established pursuant to chapter 171 or 12 U.S.C. section 1752(9), shall refuse to offer the same at every such branch of the credit union. (9) A credit union engaged in the direct sale of insurance products, or an affiliate or third party acting on its behalf, and whether acting as insurance agent or broker, shall forthwith forward copies of all member complaints relative to its insurance sales activities to the office of consumer affairs and business regulation established by section 1 of chapter 24A. The director of the office shall cause a record of all complaints received to be maintained and shall, depending upon the nature of the complaint, refer any complaint for resolution to the appropriate banking or insurance regulator in the division of banks and loan agencies or the division of insurance. The commissioner, in conjunction with the commissioner of insurance, shall establish a procedure for the prompt resolution of member complaints. Regulations promulgated by the commissioner under this section shall include provisions for investigation and resolution by a credit union of member complaints and for the requirement to forward all complaints so received to the office of consumer affairs and business regulation. (c) Any violations of the provisions contained in this section shall be subject to chapter 167, including, but not limited to, sections 2A to 2G, inclusive, and to applicable chapter 175 and chapter 176D, including, but not limited to, penalties, cease and desist orders, and suspension or loss of license. (d) This section shall not apply to the authority granted by the seventh and ninth paragraphs of section 75 of chapter 171 and section 12G of chapter 255. (e) The commissioner shall promulgate regulations necessary to carry out this section. (f) Notwithstanding any other law to the contrary, the commissioner, in his discretion, may furnish to the commissioner of insurance information, reports and statements relating to the sale of insurance by credit unions under his supervision which are licensed by the division of insurance pursuant to section 209 of chapter 175. (g) In the event that any of the provisions of this section or of section 2A of chapter 167F, are preempted by the National Credit Union Administration, by the Comptroller of the Currency of the United States pursuant to section 114 of the federal Reigle–Neal Interstate Banking and Branching Efficiency Act of 1994 (P.L.103–328), by section 104 of the federal Gramm–Leach–Bliley Act of 1999 (P.L. 106–102), by a court of competent jurisdiction or by any other applicable law, the commissioner of banks, with respect to this section, and the commissioner of insurance, with respect to sections 209 and 210 of chapter 175 may waive, in writing, the applicability of the preempted provisions to credit unions and to federal credit unions if it is determined the waiver is necessary in order to permit the entities to engage in the solicitation and sale of insurance under similar laws as banks chartered by the commonwealth pursuant to chapter 168, 170 or 172 or chartered by the laws of the United States. The waiver shall be filed with the state secretary and shall, unless otherwise provided by law, become effective on the sixtieth day following the date of the filing. A copy of the waiver shall be filed simultaneously with the committee on financial services of the general court.

M.G.L. c. 171, § 76 National Credit Union Administration Central Liquidity Facility; membership

c. 171, § 76. National Credit Union Administration Central Liquidity Facility; membership Section 76. A credit union may, with the approval of the commissioner, become a regular member of the National Credit Union Administration Central Liquidity Facility, established by 12 USC 1795b and may invest in the shares of the National Credit Union Administration Central Liquidity Facility; provided, however, that such investment shall not exceed the amount necessary to become a member of such facility. A credit union may become a member of any corporate credit union which has been approved to act as an agent of the National Credit Union Administration Central Liquidity Facility.

M.G.L. c. 171, § 77 Massachusetts Credit Union Share Insurance Corporation; insurance of shares and deposits

c. 171, § 77. Massachusetts Credit Union Share Insurance Corporation; insurance of shares and deposits Section 77. A credit union may arrange to have its shares and deposits insured by the Massachusetts Credit Union Share Insurance Corporation. A credit union may arrange with the National Credit Union Administration for the insurance of its shares and deposits pursuant to the Federal Credit Union Act, as amended. Any credit union which shall apply to said Administration for insurance shall forthwith give written notice of such application to the commissioner. If such application is accepted and such credit union is notified that the Administration is willing to provide such insurance, such credit union may become insured by said Administration; provided, however, that the acquisition of such insurance shall have been approved by the directors of the credit union. When any credit union which has applied for insurance to said Administration shall have complied with all the requirements prerequisite to obtaining such insurance and shall have received notice in writing from said Administration that it is insured by it, such credit union shall file with the commissioner copies of such notice and of the vote of its directors required by this section such copies to be certified by the president and clerk of the credit union.

M.G.L. c. 171, § 78 Consolidation

c. 171, § 78. Consolidation Section 78. Any two or more credit unions may consolidate into a single corporation on such terms as shall have been agreed upon by a vote of two-thirds of the board of directors of each corporation, and as shall have been approved in writing by the commissioner; provided, however, that such action is approved at a special meeting of the members of each corporation called for that purpose, by a vote of at least a majority of those members present, qualified to vote, and voting; and provided, further, that such consolidation has been approved in writing by the board of directors of the Massachusetts Credit Union Share Insurance Corporation, if one or more of such credit unions is a member of said corporation. A certificate subscribed by the presidents and clerks of all such credit unions, setting forth that each such credit union has complied with all the requirements of this section shall be submitted to the commissioner and if the commissioner shall approve such consolidation, he shall endorse his approval upon said certificate. Articles of consolidation or merger shall be filed with the state secretary which shall set forth the due adoption of an agreement of consolidation or merger and shall state: (i) the names of the corporations and the name of the resulting or surviving corporation; (ii) the effective date of the consolidation or merger determined pursuant to the agreement of consolidation or merger; and, (iii) any amendment to the articles of organization of the surviving corporation to be effected pursuant to the agreement of merger. Such articles of consolidation or merger shall be signed by the president or a vice president and the clerk or an assistant clerk of each corporation, who shall state under the penalties of perjury that the agreement of consolidation or merger has been duly executed on behalf of such corporation and has been approved as required. The form on which articles of consolidation or merger are filed shall also contain the following information which shall not for any purpose be treated as a permanent part of the articles of organization of the resulting or surviving corporation: (1) the post office address of the initial principal office of the resulting or surviving corporation in the commonwealth; (2) the name, residence and post office address of each of the initial trustees or directors and the president, treasurer and clerk of the resulting or surviving corporation; (3) the fiscal year of the resulting or surviving corporation initially adopted; (4) the date initially fixed in the by-laws for the annual meeting of the shareholders or members of the resulting or surviving corporation. The consolidation or merger shall become effective when the articles of consolidation or merger are filed in accordance with section six, unless said articles specify a later effective date not more than thirty days after such filing, in which event the consolidation or merger shall become effective on such later date. If none of the credit unions to be consolidated is a member of the Massachusetts Credit Union Share Insurance Corporation, the commissioner shall, and if one or more of such credit unions is a member of the Massachusetts Credit Union Share Insurance Corporation, then the commissioner and the board of directors of the Massachusetts Credit Union Share Insurance Corporation shall determine the value of shares and deposits, if any, in each consolidated credit union; and the loan reserve, investment reserve, undivided earnings and any other surplus accounts, if any, of each of such credit unions shall be disposed of as he or they may direct. Upon the consolidation of any two or more credit unions under the provisions of this section, the corporate existence of all but one of the consolidating credit unions shall be discontinued and consolidated into that of the remaining credit union, which shall continue; and the charter of each other credit union shall become void. All of the rights and privileges of each consolidating credit union and its right, title and interest to all property of whatever kind and thing in action, and every right, privilege, interest or asset of conceivable value or benefit then existing which would inure to it except for such consolidation, shall be deemed fully, and without any right of reversion, to be transferred to or vested in the continuing credit union, without further act or deed and the continuing credit union shall have and hold the same in its own right to every extent that the same was owned and held by the consolidating credit union from which it was transferred. A consolidating credit union's rights, obligations and relations to any person, member, creditor, trustee or beneficiary of any trust, as of the effective date of the consolidation, shall remain unimpaired and the continuing credit union shall, by the consolidation, succeed to all such relations, obligations and liabilities, as though it had itself assumed the relation or incurred the obligation or liability; and its liabilities and obligations to creditors existing for any cause whatsoever shall not be impaired by the consolidation; nor shall any obligation or liability of any member in any such credit union, continuing or consolidating, which is party to the consolidation, be affected by any such consolidation, but such obligations and liabilities shall continue as fully and to the same extent as the same existed before the consolidation. A pending action or other judicial proceeding to which any of the consolidating credit unions is a party shall not be deemed to have abated or to have discontinued by reason of the consolidation, but may be prosecuted to final judgment, order or decree in the same manner as if the consolidation had not been made; or the continuing credit union may be substituted as a party to any such action or proceeding to which the consolidating credit union was a party, and any judgment, order or decree may be rendered for or against the continuing credit union that might have been rendered for or against such consolidating credit union if consolidation had not occurred. If the consolidating credit unions have main offices in different counties, the main office of the continuing credit union shall be the main office of that consolidating credit union which has the greater total assets on the date on which the merger or consolidation is approved by the board of directors of the last consolidating corporation so to approve. A credit union may consolidate with and into a federally-chartered credit union and a federally-chartered credit union may consolidate with and into a credit union. In any such consolidation, the credit union shall comply with the applicable provisions of this section. A federally-chartered credit union in such a transaction shall comply with applicable federal law.

M.G.L. c. 171, § 78A Merger or consolidation of credit unions with savings bank, co-operative bank or subsidiary banking institution

c. 171, § 78A. Merger or consolidation of credit unions with savings bank, co-operative bank or subsidiary banking institution Section 78A. Any 1 or more credit unions may merge or consolidate with 1 or more savings banks, as defined in section 1 of chapter 168, or 1 or more co-operative banks, as defined in section 1 of chapter 170, or 1 or more subsidiary banking institutions, as defined in section 1 of chapter 167H and section 4 of chapter 167I.

M.G.L. c. 171, § 78B Repealed, 2014, 482, Sec. 57

M.G.L. c. 171, § 79 Merger of credit unions under possession of commissioner or Massachusetts Share Insurance Corporation

c. 171, § 79. Merger of credit unions under possession of commissioner or Massachusetts Share Insurance Corporation Section 79. If the commissioner has taken possession of a credit union as provided for in sections 22 to 26, inclusive, of chapter 167 or a credit union is in the possession of the Massachusetts Share Insurance Corporation and it is determined by the commissioner and the insurer that it is in the best interests of the depositors, shareholders and insurer, a merger as provided for in section 78 may be effected without regard to geographical limitations within the commonwealth.

M.G.L. c. 171, § 80 Foreign credit unions; consent for incorporation

c. 171, § 80. Foreign credit unions; consent for incorporation Section 80. Any credit union operating under a charter other than one issued by the commonwealth and having a usual place of business therein may, if authorized by a vote of at least a majority of its members present and voting at a meeting specially called for that purpose, make application to the commissioner for consent for incorporation under this chapter. Said commissioner may grant his consent to such incorporation when satisfied that the assets of such credit union qualify for investment by a credit union incorporated under this chapter. If any of the assets of the applicant credit union do not qualify as legal investments for a credit union incorporated under this chapter, such consent may nevertheless be given, subject to such terms with respect to the time in which the same shall be disposed of or converted into legal assets as the commissioner may impose. Upon the issuing by the state secretary of the certificate of incorporation, all of the assets of the applicant credit union shall be transferred to and vested in the credit union so incorporated, to the same extent as would result from a merger of the applicant credit union and the new credit union under section seventy-eight. The newly incorporated credit union shall thereupon issue its shares, in the same amount and to the same persons, in satisfaction of the shares of the applicant credit union, and assume the deposit and other liabilities thereof. Thereupon the charter of the applicant credit union shall be surrendered to the issuing authority for cancellation by it and the new credit union shall be operated under and governed by this chapter.

M.G.L. c. 171, § 80A Conversion of credit union into mutual savings bank, mutual co-operative bank, mutual federal savings bank or mutual federal savings and loans association

c. 171, § 80A. Conversion of credit union into mutual savings bank, mutual co-operative bank, mutual federal savings bank or mutual federal savings and loans association Section 80A. (a) A credit union subject to this section may convert into a mutual savings bank governed by chapter 168, a mutual co-operative bank governed by chapter 170, a mutual federal savings bank or a mutual federal savings and loans association which exist under authority of the United States. The conversion shall comply with all applicable federal laws and regulations. A credit union insured by the Massachusetts Credit Union Share Insurance Corporation shall file notification of its intent to convert with said corporation at least 90 days before the date of the proposed special meeting of the members of the credit union. No credit union may convert pursuant to this section so long as any financial assistance provided by said corporation to such credit union remains unpaid or has not been compromised or settled. Any such repayment, compromise or settlement shall be approved by the commissioner. (b) A credit union shall file with the commissioner, at the same time, notices, disclosures and communications required by or sent to the National Credit Union Administration or a regional director. The commissioner may require changes and additions to notice, disclosure or communication, except as required by federal law or regulation. (c) A credit union that is adequately capitalized and has received at least a satisfactory rating in its most recent examination for compliance with the Community Reinvestment Act may submit a plan of conversion approved by a 2/3 vote of the entire board of directors to the commissioner. Unless waived by the commissioner, the plan shall include but not be limited to: (1) a 3 year business plan for the appropriate chartered bank which shall include pro forma financial statements for the mutual bank; (2) a commitment by the converting credit union that it will not convert to a stock form before the expiration of 1 year of the effective date of the conversion to a mutual bank charter; (3) an estimated budget for conversion expenses; (4) financial statements for the most recently completed quarter; (5) if applicable, the procedures and timing for termination of excess deposit insurance from the Massachusetts Credit Union Share Insurance Corporation; and (6) other relevant information that the commissioner may reasonably require. (d) Included with the plan shall be an information statement to be sent to members which shall fully and fairly disclose all significant terms and steps to be taken for the conversion and shall include but not be limited to: (1) a statement as to why the board is considering the conversion; (2) a statement of the major positive and negative business effects of the proposed conversion; (3) the impact on the member's financial and other interests in the credit union; (4) a disclosure that the conversion from a credit union to a mutual bank could lead to a member losing ownership interest in the credit union if the mutual bank subsequently converts to a stock institution and the member does not become a stockholder; and (5) a disclosure of any conversion related economic benefit a director or senior management official may receive including receipt of or an increase in compensation and an explanation of any foreseeable stock related benefits associated with a subsequent conversion to a stock institution; the explanation of stock related benefits shall include a comparison of the opportunities to acquire stock that are available to officials and employees, with those opportunities available to the general membership. (e) A converting credit union shall file with the commissioner a plan of conversion and an information statement at least 120 days before the date of the proposed special meeting of the members. The commissioner may require reasonable changes to the plan of conversion and information statement. The commissioner may also require any equitable disclosure he determines applicable to the proposed conversion to a mutual bank transaction. The commissioner may specify the form, type and other material aspects of the plan of conversion and information statement to be sent to members, except to the extent that it does not conflict with federal law or regulation. (f) The commissioner shall review the contents of the plan before the credit union board presents the conversion plan to the members for a vote. The commissioner shall authorize the distribution of the conversion plan and information statement only if the commissioner is satisfied of all of the following: (1) the plan discloses to the members information concerning the advantages and disadvantages of the proposed conversion; (2) the information statement discloses the impact on the member's financial and other interests in the credit union; and (3) the conversion would not be made to circumvent a pending supervisory action that is initiated by the commissioner or other regulatory agency because of a concern over the safety and soundness of the credit union. (g) The commissioner shall render a decision within 30 days from the date of the filing of the plan or any amendment thereof. Upon authorization by the commissioner of the distribution of the contents of the conversion plan and information statement, the credit union shall call a special meeting of the members to vote on the conversion plan. At least 30 days before the special meeting, the credit union shall mail to each member a notice of the special meeting, the conversion plan and information statement. (h) The plan of conversion shall be approved by a majority vote of those members voting. A member may vote on the proposal to convert in person at the special meeting held on the date set for the vote or by written ballot filed by the member. The vote on the conversion proposal shall be by secret ballot and conducted by an independent entity. The independent entity shall be a company with experience in conducting corporate elections. A director or officer of the credit union, or an immediate family member of a director or officer, shall not have an ownership interest in, or be employed by, the entity. (i) A credit union or an officer or director thereof shall not directly or indirectly give or offer or provide a chance to win a lottery or anything of substantial value, as determined by the commissioner, to the membership or a member of the credit union for an action related to the conversion to a mutual bank or as an inducement to vote on the plan of conversion. (j) The provisions on notice to members and voting procedures in this section shall govern the process for converting to a mutual bank notwithstanding other provisions of this chapter or a by-law of the converting credit union to the contrary. (k) Certified copies of the results of the board and membership meetings of the credit union shall be filed with the commissioner. The credit union shall also certify that the information statement, plan, and other written materials provided to members were identical to those materials considered satisfactory by the commissioner. (l) If the commissioner disapproves of the methods by which the membership vote was taken or the procedures applicable to the vote, the commissioner may direct that a new vote be taken. If the commissioner does not disapprove of the methods by which the membership vote was taken within 10 days after the notification is given, the vote shall be considered approved. (m) If the conversion to a mutual savings bank or a mutual co-operative bank is approved by the members, and the commissioner receives notification from the converting credit union that approvals required under state and federal law and regulations, including approvals needed for deposit insurance by the Federal Deposit Insurance Corporation, have been obtained and that any waiting period prescribed by federal law has expired or it will become a member of the Depositors Insurance Fund and of the Deposit Insurance Fund thereof and has made all applicable payments thereto as determined by the commissioner, a certificate to transact business shall be issued by the commissioner as applicable. A conversion to a state-chartered savings bank or a state-chartered co-operative bank under this section shall not be consummated until arrangements satisfactory to the Depositors Insurance Fund have been made and notice thereof has been received by the commissioner. After receipt of the certificate to transact business, the converting credit union shall promptly file the certificate and its articles of organization with the secretary of state. Upon the filing, the charter of the converting credit union shall automatically cease and the converting credit union shall cease to be a credit union and shall become a mutual savings bank or a mutual co-operative bank. Upon the conversion, the converted mutual bank shall possess all of the rights, privileges and powers granted to it by its articles of organization and by the laws applicable to the type of mutual bank charter into which it converted, and all of the assets and business of the converting credit union shall be transferred to and vested in it without any deed or instrument of conveyance; but the converting credit union may execute a deed or instrument of conveyance as is convenient to confirm the transfer. The converted mutual bank shall be subject to all of the duties, relations, obligations and liabilities of the converting credit union, whether as debtor, depository or otherwise, and shall be liable to pay and discharge the debts and liabilities, to perform all the duties in the same manner and to the same extent as if the converted mutual bank had itself incurred the obligation or liability or assumed the duty or relation. Rights of credits of the converting credit union and liens upon the property of such credit union shall be preserved unimpaired and the converted mutual bank shall be entitled to receive, accept, collect, hold and enjoy all gifts, bequests, devises, conveyances and appointments in favor of or in the name of the converting credit union and whether made or created to take effect before or after the conversion. (n) If the conversion to a mutual federal savings bank or a mutual federal savings and loan association is approved by the members the converting credit union shall provide notification to the commissioner that all approvals under state and federal law and regulations including approvals needed for deposit insurance by the Federal Deposit Insurance Corporation have been obtained and that any waiting period prescribed by federal law has expired and shall provide a certified copy of the approval of the federal mutual charter by the Office of Thrift Supervision or any successor agency thereto. Upon acceptance of the federal charter, the converting credit union's charter from the commonwealth shall cease to exist. (o) A person who willfully violates the disclosure provisions of this section knowing the disclosure made to be false or misleading in a material respect shall upon conviction be fined not more than $5,000 or imprisoned not more than 3 years, or both.

M.G.L. c. 171, § 80B Credit union chartered in commonwealth converted to federal charter

c. 171, § 80B. Credit union chartered in commonwealth converted to federal charter Section 80B. (a) A credit union chartered in the commonwealth may convert, subject to this section, into a credit union chartered under applicable federal law and regulations upon the affirmative vote of a majority of the members of the credit union voting on the proposal. (b) The board of directors of a credit union chartered in the commonwealth, by an affirmative vote of two-thirds of the entire board, may approve a plan of conversion and submit the plan to the commissioner for his review. Included with the plan shall be an information statement to be sent to members which shall fully and fairly disclose all significant terms and steps to be taken for the conversion and shall include but not be limited to the following:— (1) a statement as to why the board of directors is considering the conversion; (2) a statement of the major positive and negative business effects of the proposed conversion; and (3) the impact on the member's financial and other interests in the credit union. (c) The commissioner shall review the contents of the plan before the credit union board of directors presents the conversion plan to the members for a vote. The commissioner may require changes to the plan of conversion and information statement. The commissioner may also require an equitable disclosure if he determines such disclosure is applicable to the transaction. The commissioner may specify the form, type and other material aspects of the plan of reorganization and information statement to be sent to members. The commissioner shall approve the contents of the conversion plan and information statement only if the commissioner is satisfied that the following elements have been met:— (1) the plan discloses to the members information concerning the advantages and disadvantages of the proposed conversion; (2) the information statement discloses the impact on the member's financial and other interests in the credit union; and (3) the conversion would not be made to circumvent a pending supervisory action that is initiated by the commissioner or other regulatory agency because of a concern over the safety and soundness of the credit union. (d) Upon approval of the contents of the conversion plan and information statement by the commissioner, the credit union shall call a special meeting of its members to vote on the conversion plan. At least 14 days before the meeting, the credit union shall mail to each member a notice of the meeting, the conversion plan and information statement. (e) Certified copies of records of all proceedings held by the board of directors and members of the credit union shall be filed with the commissioner. In addition, the credit union shall furnish a certified copy of consent or approval of the federal regulatory authority to the commissioner. Upon acceptance of the federal charter, the credit union's charter from the commonwealth shall terminate. (f) A person who willfully violates the disclosure provisions of this section knowing such disclosure made to be false or misleading in any material respect shall be punished by a fine of not more than $5,000 or by imprisonment for not more than 3 years, or both.

M.G.L. c. 171, § 81 Liquidation

c. 171, § 81. Liquidation Section 81. At any regular or special meeting, if proper notice of the purpose has been given, the members, upon recommendation of not less than two-thirds of the board of directors, may, by a majority vote of those present and entitled to vote, vote to liquidate the credit union. If a credit union is a member of the Massachusetts Credit Union Share Insurance Corporation, a committee of four shall be appointed in the following manner for the purpose of conserving and liquidating the assets, under the direction of said Massachusetts Credit Union Share Insurance Corporation and the commissioner: two members of the committee shall be appointed by the board of directors of the Massachusetts Credit Union Share Insurance Corporation, and two members shall be appointed by the liquidating credit union. If the credit union is not a member of the Massachusetts Credit Union Share Insurance Corporation, a committee of four members shall thereupon be elected by the members of the credit union for the purpose of conserving and liquidating the assets, under the direction of the commissioner. Any vacancy in the membership of the committee shall be filled by the remaining members thereof. The committee, in the name of the credit union, may prosecute and defend all suits and other legal proceedings and may execute all deeds and other instruments necessary to effectuate any sale of real or personal property or any compromise authorized by the committee; and any instrument so executed shall be valid and effectual to the same extent as though executed by the officers of the credit union by authority of its board of directors or of its members. After the credit union has voted to liquidate, no receipts shall be accepted for, or withdrawals be allowed from, its share or deposit accounts and no shares shall be transferred to deposits. No loans shall be offset against shares except as approved by the committee. After the payment of all debts and deposits, all holders of claims arising out of the ownership of shares, including persons who have not received payment for shares after requesting the withdrawal thereof, shall be entitled to the remaining assets in liquidation in proportion to their respective interests therein. The charter of a credit union in process of liquidation shall become void except for the purpose of discharging existing obligations and liabilities. Funds representing unclaimed dividends in liquidation and remaining in the hands of the liquidating committee for six months after the date of the final dividend, shall be deposited by them together with all books and papers of the credit union, with the commissioner. Such funds shall be deposited in one or more trust companies, savings banks or national banks or on paid up shares and accounts of and in cooperative banks, or be used to purchase share accounts of a federal savings and loan association located in the commonwealth to the credit of the commissioner in his official capacity in trust for the members of the liquidating credit union entitled thereto, according to their several interests. Upon receipt of evidence satisfactory to him, the commissioner may pay over the money so held by him to the persons respectively entitled thereto. In cases of doubt or of conflicting claims, he may require an order of the supreme judicial court authorizing and directing the payment thereof. He may apply the interest earned by the moneys so held toward defraying the expenses incurred in the payment of such unclaimed dividends. At the expiration of twelve months from the date of receipt thereof, such funds as still remain in the hands of the commissioner shall be disposed of as provided in section thirty-five of chapter one hundred and sixty-seven. The provisions of this section providing for a preference in the payment of deposit liability shall not apply to credit unions which are insured in full.

M.G.L. c. 171, § 82 Credit Union Employees Retirement Association; eligibility; contributions; plans offered by providers other than the association

c. 171, § 82. Credit Union Employees Retirement Association; eligibility; contributions; plans offered by providers other than the association Section 82. (a) For the purposes of this section and sections 83 and 84, the following terms shall, unless the context clearly requires otherwise, have the following meanings: ''Association'', the Credit Union Employees Retirement Association formed pursuant to this section. ''Credit union'' or ''credit unions'', any or all of: (i) a bank or credit union chartered by the commonwealth; (ii) such bank or credit union that has converted to a federal charter; (iii) a bank or credit union chartered by the federal government, by a state of the United States other than the commonwealth or by the District of Columbia; (iv) the Cooperative Credit Union Association, Inc. and its successors; (v) the Massachusetts Credit Union Share Insurance Corporation; (vi) other banking or credit union institutions as may from time to time be provided for in the by-laws of the association; and (vii) the respective employees of each of the organizations listed in this definition. ''Customer'', any person or business who has established a contractual relationship for banking business purposes with any credit union located in the commonwealth that is a member of the association. ''Directors of a credit union'', the governing body of each member organization of the association. (b)(1) Credit unions may form the Credit Union Employees Retirement Association to provide retirement or deferred compensation benefit services through plans that are qualified under section 401, section 408 or section 457 of the federal Internal Revenue Code to employees of credit unions that are established under state law and are members of the association and to their customers. Any credit union shall be eligible for membership in the association; provided, however, that a bank that was eligible to be a member of the association before January 1, 2004, shall not be eligible to become a member of the Cooperative Banks Employees Retirement Association or the Savings Banks Employees Retirement Association unless and until the Cooperative Banks Employees Retirement Association or the Savings Banks Employees Retirement Association permits a member to transfer from any or all of the qualified plans provided by said association, assets and liabilities, attributed to the member's employees, to 1 or more qualified plans not provided by said association. (2) Eligible employees may contribute a portion of their compensation and a credit union may contribute to the extent determined by its governing body; provided, however, that all such contributions shall not exceed the limits of said section 401, said section 408 or said section 457 of the federal Internal Revenue Code, as applicable. (3) The funds contributed by participating credit unions and their employees shall be held or used by the trustees of the association for the provision of retirement and deferred compensation benefits, including pre-retirement, post-retirement cost-of-living adjustment, death and disability benefits incident thereto, in all cases subject to the limits of said section 401, said section 408 or said section 457 of the federal Internal Revenue Code, as applicable. Expenses necessary for the administration of the association shall be paid by participating members as provided in the by-laws of the association. The association shall annually provide to each member a report of assets and liabilities attributable to its participants in any or all qualified plans adopted by a member. (4) A credit union providing retirement benefits to its employees through a plan offered by a provider of plans other than the association shall file with the commissioner such reports as the commissioner may from time-to-time require; provided, however, that such a plan shall be a qualified plan under said section 401, said section 408 or said section 457 of the federal Internal Revenue Code.

M.G.L. c. 171, § 83 Credit Union Employees Retirement Association; by-laws; reports

c. 171, § 83. Credit Union Employees Retirement Association; by-laws; reports Section 83. The by-laws of the association shall be submitted to the commissioner and shall prescribe the manner in which, and the officers and agents by whom, the association may be conducted and the manner in which its funds may be invested and paid out. The association shall be formed when its by-laws have been approved and agreed to by a majority of the directors of each of 15 or more credit unions and have been approved by the commissioner. The association shall provide to the commissioner such statements of the membership and financial transactions of the association as the commissioner may from time-to-time require. The commissioner may verify any such statement by an examination of the books and papers of the association. The association shall not be subject to chapter 32 or chapter 175 or to such other provisions of law related to insurance companies or other retirement associations.

M.G.L. c. 171, § 84 Credit Union Employees Retirement Association; tax exemption; attachment

c. 171, § 84. Credit Union Employees Retirement Association; tax exemption; attachment Section 84. The property of the association, the portion of the compensation of any employee deducted or to be deducted under sections eighty-two and eighty-three, the right of an employee to an annuity or pension and all his rights in the funds of the association, shall be exempt from taxation and from the operation of any law relating to insolvency, insurance, retirement systems or pensions and shall not be attached or taken on execution or other process to satisfy any debt or liability of the association, a participating credit union or any employee member of the association. No assignment of any right in or to said funds or of any pension or annuity payable under section eighty-two shall be valid. Nothing in this section shall be construed to 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 two hundred and eight, two hundred and nine, or two hundred and seventy-three.

M.G.L. c. 171, § 33,34 Repealed, 2020, 338, Sec. 44

M.G.L. c. 171, § 44,45 Repealed, 2020, 338, Sec. 49

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter171Fetched: 10/20/2026