Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. Chapter 167E of the General Laws is hereby amended by striking out section 3A, as appearing in section 9 of chapter 155 of the acts of 1982, and inserting in place thereof the following section:-
Section 3A. Any note or mortgage secured by a first lien on a dwelling house of four or fewer separate households occupied or to be occupied in whole or in part by the mortgagor may provide for monthly payments of interest only for up to the first ten years of its or their term and subsequent monthly payments in such amounts that aggregate principal reduction at any time during the remaining term of such note shall not be less than that which would be required in the case of a note of like amount and interest rate providing for complete amortization by equal monthly payments over the term of the loan which payment shall be first applied to interest and the balance thereafter remaining applied to principal.
SECTION 2. The second paragraph of section 36 of chapter 168 of the General Laws, as appearing in section 29 of said chapter 155, is hereby amended by striking out the last sentence and inserting in place thereof the following sentence:- Such corporation shall, however, participate in any distribution made under the provisions of section ten of said chapter forty-three, but such distribution shall be limited to an amount equal to the amount the corporation would have received had the Deposit Insurance Fund been liquidated at the time such corporation accepted its federal charter; and provided however, that such corporation may also participate in any dividends paid pursuant to section three of said chapter forty-three to the extent the board of directors of said Mutual Savings Fund, Inc., declares dividends for payment to former member banks which have accepted federal charters, subject to the prior approval of the commissioner as provided for in said section three of said chapter forty-three.
SECTION 3. Said chapter 168 is hereby further amended by striking out section 38, as amended by section 54 of chapter 371 of the acts of 1983, and inserting in place thereof the following section:-
Section 38. Any federal savings and loan association or federal savings bank may convert to a savings bank under the provisions of this chapter upon a vote of fifty-one per cent or more votes of members of such federal savings and loan association or two-thirds of the board of trustees of such federal savings bank present and voting at an annual meeting or at any special meeting called to consider such action. Notice of such meeting to vote on such conversion shall be mailed at least twenty, and not more than thirty days prior to the date of such meeting to each member or trustee of record at his last known address shown on the books of the association or bank.
Copies of the minutes of the proceedings of such meeting of members or trustees verified by the affidavit of the secretary or an assistant secretary or clerk shall be filed in the office of the commissioner and mailed to the Federal Home Loan Bank Board, Washington, D.C., within ten days after such meeting. Such verified copies of the proceedings of the meeting when so filed shall be presumptive evidence of the holding and action of such meeting. At the meeting at which conversion is voted upon, the members or trustees shall also vote upon the persons who shall be the corporators and trustees of the state-chartered savings bank after conversion takes effect.
The commissioner may provide, by regulation, for the procedure to be followed by any such federal savings and loan association or federal savings bank converting into a savings bank.
Upon the conversion of a federal savings and loan association or federal savings bank into a savings bank authorized to conduct business in the commonwealth the corporate existence of such association or bank shall not terminate, but such state-chartered savings bank shall be deemed to be a continuation of the entity of the association or bank so converted and all property of the converted association or bank including its rights, titles and interests in and to all property of whatsoever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, or pertaining to it, or which would inure to it, shall immediately by act of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue and be the property of such savings bank into which the federal association or federal savings bank has converted itself, and such savings bank shall have, hold and enjoy the same in its own right as fully and to the extent as the same was possessed, held and enjoyed by the converting association or bank and such savings bank as of the time of the taking effect of such conversion shall continue to have and succeed to all the rights, obligations, and relations of the converting association or bank. All pending actions and other judicial proceedings to which the converting federal association or federal savings bank is a party shall not be deemed to have been abated or to have been discontinued by reasons of such conversion, but may be prosecuted to final judgment, order or decree in the same manner as if such conversion into such savings bank had not been made and such savings bank resulting from such conversion may continue such action in its corporate name as a savings bank, and any judgment, order or decree may be rendered for or against it, which might have been rendered for or against such converting federal association or bank theretofore involved in such judicial proceedings.
Upon the completion of the conversion of a federal savings and loan association or federal savings bank into a savings bank under the provisions of this chapter, said savings bank shall become a member of the Mutual Savings Central Fund, Inc., hereinafter called the Fund, and of the Deposit Insurance Fund thereof. Before such succeeding corporation shall commence business as a savings bank, it shall pay into the Liquidity Fund of the Fund, an amount equal to the deposit required of a member bank thereof a similar size, as of the date of said certificate, plus such additional amount based upon the surplus of said Reserve Fund, as the directors of the Fund, with the approval of the commissioner, shall determine to be equitable. In addition to the payment to said Reserve Fund, the succeeding corporation shall pay to said Deposit Insurance Fund or make provisions for payment thereto of a sum based upon the relation which the total amount of all assessments paid into such Deposit Insurance Fund by all member banks, exclusive of annual assessments, plus the amount of the earned surplus account of said fund, less all losses and expenses incurred by said fund with respect to savings banks which it has assisted or liquidated, bears to the insured liabilities of all member banks; provided, however, that such payment shall be not less than the sum of six times the average applicable annual assessments paid by member banks during the preceding five years; and provided, further, that the succeeding corporation shall pay to said Deposit Insurance Fund such proportion of the current and annual assessments as shall have accrued to the date of said certificate.
After compliance with the foregoing requirements, the succeeding corporation shall thereafter be entitled to exercise all of the rights and privileges, and shall be subject to all of its duties and obligations of a savings bank and shall conduct its business subject to the provisions of this chapter and of 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 provisions of such laws not hereinbefore specifically provided for and which it shall be unable to comply with on or before said date.
The commissioner may require the succeeding corporation to divest itself, within a reasonable time after the effective date of the conversion, of any branch office not in conformity with law, if he shall determine that the public interest so requires.
SECTION 4. Section 15B of chapter 171 of the General Laws, inserted by section 65 of chapter 371 of the acts of 1983, is hereby amended by striking out, in line 9, the word "bank" and inserting in place thereof the words:- credit union.
SECTION 5. Section 3 of chapter 43 of the acts of 1934 is hereby amended by striking out the first sentence, as appearing in section 6 of chapter 324 of the acts of 1956, and inserting in place thereof the following two sentences:- The corporation may pay dividends to member banks at such rates and at such times as the directors may determine, subject to the prior approval of the commissioner of any such payment, rates and times and subject to his prior approval as to the terms, conditions and use of such payment to member banks, upon the amounts paid in by such banks to the Deposit Insurance Fund or upon the unexpended portion thereof and in reduction of unpaid portions of principal of participating interests in assessments to which a bank which shall have become a member of the Federal Deposit Insurance Corporation may be entitled as provided in section fifteen. The corporation may also pay dividends at such rates and at such times as the directors may determine, subject to the prior approval of the commissioner of any such payment, rates and times and subject to his prior approval as to the terms, conditions and use of such payment, to banks which have previously been member banks but which are no longer member banks under the provisions of section thirty-six of chapter one hundred and sixty-eight of the General Laws.
SECTION 6. Nothing in this act shall be construed to allow any former member bank which has ceased to be a member in the Mutual Savings Central Fund by reason of conversion to federal charter in accordance with the provisions of section thirty-six of chapter one hundred and sixty-eight of the General Laws, to regain membership in said Mutual Savings Central Fund, Inc., or said Deposit Insurance Fund, thereof, or to receive any other benefit accruing to a state-chartered savings bank resulting from membership in the said Mutual Savings Central Fund, Inc., or Deposit Insurance Fund.
SECTION 7. Any dividend received by a bank pursuant to this act shall be income pursuant to applicable tax law.
SECTION 8. There is hereby established a special commission, to consist of two members of the senate, three members of the house of representatives, the commissioner of banks, and three persons to be appointed by the governor, one of whom shall be appointed from a list submitted by the Savings Banks Association of Massachusetts, one of whom shall be appointed from a list submitted by the Massachusetts Co-operative Bank League, and one of whom shall be appointed from a list submitted by the Credit Union League of Massachusetts, for the purpose of making an investigation and study of the state systems for the insurance of deposits made in financial institutions located in the commonwealth.
Said commission shall, in the course of its investigation and study, consider the present and projected adequacies of the state deposit insurance systems to protect the interest of Massachusetts residents, the federal systems for deposit insurance and their comparisons, if any, with the state systems, and such other related matters as the commission may deem relevant. Said commission may employ such assistance as it may deem necessary. All costs for the administration and operation of said commission shall be borne by the Deposit Insurance Fund, established by chapter forty-three of the acts of nineteen hundred and thirty-four, the Share Insurance Fund, established by chapter seventy-three of the acts of nineteen hundred and thirty-four, and the Massachusetts Credit Union Share Insurance Corporation, established by chapter two hundred and ninety-four of the acts of nineteen hundred and sixty-one.
Said commission shall report to the general court the results of its investigations and study, and its recommendations, if any, together with drafts of legislation necessary to carry such recommendations into effect, by filing the same with the clerk of the senate on or before the first Wednesday of July, nineteen hundred and eighty-five.