Massachusetts General Laws ch. 167I sec. 17 – Notice to Depositors Insurance Fund upon proposal to merge or consolidate co-operative bank into a bank or upon conversion to federal charter; effect of acceptance of federal charter; effect of conversion of f
Section 17. (a) Upon a proposal to merge or consolidate a co-operative bank with and into a bank, other than a co-operative bank, a federally-chartered bank or an out-of-state bank or conversion to a federal charter, such co-operative bank shall send a notice in writing by registered mail to the Depositors Insurance Fund, established by chapter 44 of the acts of 1932, not less than 60 days before the meeting of the directors to vote on the merger, consolidation or conversion.
Terms Used In Massachusetts General Laws ch. 167I sec. 17
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
Upon a merger or a consolidation by a co-operative bank with and into a bank, a federally-chartered bank or an out-of-state bank, other than a co-operative bank, the co-operative bank shall cease to be a member bank in the Depositors Insurance Fund. Notwithstanding any general or special law to the contrary, upon any such merger or consolidation, the co-operative bank shall not succeed to or acquire any rights, including, but not limited to, rights to dividends or to the proceeds of any distribution in complete or partial dissolution or liquidation, in the Depositors Insurance Fund or in its Liquidity Fund or Deposit Insurance Fund.
(b) Upon the acceptance by a co-operative bank of a federal charter and after the commissioner has received from the state secretary a certificate that the co-operative bank, hereinafter referred to as the predecessor corporation, has been duly recorded for dissolution, paragraphs 1 and 2 shall apply.
(1) The predecessor corporation shall cease to be a member bank in the Depositors Insurance Fund. Notwithstanding any general or special law to the contrary, following its acceptance of a federal charter, the succeeding bank shall not retain, succeed to or acquire any rights, including, but not limited to, rights to dividends or to the proceeds of any distribution in complete or partial dissolution or liquidation, in the Depositors Insurance Fund or in its Liquidity Fund or Deposit Insurance Fund, except to the extent specifically provided in this paragraph. If the succeeding bank shall, subsequent to its acceptance of a federal charter: (i) convert to a Massachusetts-chartered co-operative bank and become a member of the Depositors Insurance Fund; or (ii) become a federal member of the Depositors Insurance Fund, the succeeding bank shall, for so long as it shall remain a member or federal member bank of the Depositors Insurance Fund, participate in any dividends paid pursuant to section 3 of chapter 43 of the acts of 1934, any distributions made pursuant to section 10 of said chapter 43 and any dividends paid and any withdrawals or returns of deposits authorized pursuant to section 4 of chapter 44 of the acts of 1932, in each case based upon the retained amounts paid in by the predecessor corporation to the Deposit Insurance Fund and the Liquidity Fund, respectively, without regard to whether such amounts were paid before or after acceptance of a federal charter, or upon the unexpended portion thereof, in the same manner and to the same extent as it would have been entitled to participate if the predecessor corporation had not accepted a federal charter.
(2) The predecessor corporation or the succeeding bank shall pay to the Deposit Insurance Fund or make provision for payment thereto of a sum equal to 3 annual assessments, referred to in section 4 of said chapter 43 at the percentage rate in effect at the time the predecessor corporation ceased to be a member bank and computed on the basis of its share liabilities and notes payable as shown by its last annual report to the commissioner preceding the conversion or, at its option or at the option of the succeeding bank as shown by the records of the predecessor corporation on the effective date of conversion. Until such sum shall have been paid in full, payments on account thereof shall be made annually or more often by the predecessor corporation or the succeeding bank; provided, however, that not less than 1/3 of such sum shall be paid annually; provided further, that if any such 1/3 shall not be so paid or if, at the end of 3 years from the time the predecessor corporation ceased to be a member bank, such sum shall not have been paid in full, the entire balance thereof may be incurred by the Depositors Insurance Fund, together with interest thereon, in any manner provided by law for the collection of debts. The predecessor corporation or the succeeding bank may authorize the deduction of such sum, in whole or in part, from the amount, if any, of the portions of said other assessments to which the succeeding bank may be entitled as hereinbefore provided. If, however, by federal law or regulation a federal bank converting therefrom to a co-operative bank is required to pay to the Federal Deposit Insurance Corporation a sum equal to annual premiums or assessments for other than a period of 3 years, then the number of annual assessments payable to the Deposit Insurance Fund under this section shall be for the same number of years as is so required.
(c) The commissioner may establish the procedure to be followed by a federal bank or federal thrift converting into a co-operative bank; provided, however, that no such conversion shall become effective unless approved in writing by the commissioner. The commissioner shall not grant approval until the commissioner has received notice from the Deposit Insurance Fund of the Depositors Insurance Fund that arrangements satisfactory to the Deposit Insurance Fund have been made for the conversion.
If an application for conversion is approved by the commissioner as provided in this section, such federal bank or federal thrift shall cause to be filed with the state secretary the name, residence and post office address of each of the officers and directors of such federal bank or federal thrift, a copy of its proposed by-laws amended to conform with the requirements of section 7 and such other information as the state secretary may require.
After approval of the conversion by the commissioner and receipt by the commissioner of satisfactory evidence that all federal laws and regulations relative to the conversion have been or will be duly complied with, the commissioner shall file with the state secretary a certificate of the commissioner’s approval. After receipt of the certificate by the state secretary, if the state secretary finds that the requirements of this section have been satisfactorily complied with, the state secretary shall so certify and upon receipt of a fee, the amount of which shall be determined annually by the secretary of administration and finance under section 3B of chapter 7, the state secretary shall issue to the officers and directors, in such form as the state secretary may prescribe, a certificate of incorporation as a co-operative bank.
Simultaneously with the receipt of the certificate, the bank, hereinafter referred to as the succeeding corporation, shall become a member of the Depositors Insurance Fund and of the Deposit Insurance Fund. Before the succeeding corporation shall commence business as a co-operative bank, it shall pay into the Liquidity Fund of the Depositors Insurance Fund, established under chapter 44 of the acts of 1932, an amount equal to the deposit required of a member bank thereof of similar size, as of the date of the certificate, plus such additional amount based upon the surplus of the Liquidity Fund, as the directors of the Depositors Insurance Fund, with the approval of the commissioner, shall determine to be equitable.
In addition to the payment to the Liquidity Fund, the succeeding corporation shall pay to the Deposit Insurance Fund or make provision for payment thereto of such a sum as the directors of the Depositors Insurance Fund, with the approval of the commissioner, shall determine to be equitable; provided, however, that the succeeding corporation shall pay to the Deposit Insurance Fund such proportion of any current annual assessment as shall have accrued to the date of the certificate.
After compliance with the foregoing requirements, the succeeding corporation shall be entitled to exercise all of the rights and privileges and shall be subject to all of the duties and obligations of a co-operative bank and shall conduct its business subject to this chapter and other applicable laws; provided, however, that with the approval of the commissioner, the succeeding corporation shall have reasonable time after the effective date of the conversion within which to comply with any particular laws not hereinbefore specifically provided for and which it shall be unable to comply with on or before the effective date.