[ Text of section effective until March 19, 2009. For text effective March 19, 2009, see below.]
Section 2. The commissioner, either personally or by his examiners, or such other of his assistants as he may designate, shall, at least once in each calendar year, or at least once in an eighteen month period in the case of a bank which is well capitalized as defined in 12 USC 1831(o) and the regulations promulgated thereunder, make a thorough examination of the books, securities, cash, assets and liabilities and ascertain the condition of all banks under his supervision, including Massachusetts and out-of-state branches, the ability of each bank to fulfill its obligations, and also whether it has complied with all applicable law; and he may also, whenever he considers it expedient, make or cause to be made, at the expense of the bank, such further examinations or audits as he deems advisable, by his examiners or by certified public accountants or public accountants not connected with such bank approved by him and subject to his direction, and he may also, whenever he considers it expedient, appoint individuals certified as real estate appraisers by the society of real estate appraisers, or similar successor society, to make, at the expense of the bank, appraisals of real estate securing loans of the bank and at the time he names such appraiser, he shall so notify the bank and advise it of the date on which he has requested submission of the appraisal report to him, whereupon the bank may then appoint an appraiser who may submit the report of his appraisal to the commissioner on the same date.
An annual charge shall be paid by each bank under the supervision of the commissioner which shall be based on the total amount of assets held by each such bank as stated on the report to the commissioner filed most recent to the thirty-first day of December of each preceding year which will be sufficient to reimburse the commonwealth for all direct and indirect costs of the operations of the office of the commissioner of banks, and each such bank shall within thirty days notice from the commissioner of the charge assessed, pay such charge. Said notice shall be issued annually by the commissioner on the thirty-first day of January of each calendar year. Such charge shall be determined annually by the commissioner of administration, with the assistance of the commissioner, under the provisions of section three B of chapter seven and may contain such classifications and differentiations based upon the financial condition of such banks as he deems appropriate; provided, however, that such classifications of individual institutions shall be exempt from the provisions of section ten of chapter sixty-six. Such annual charge shall be paid, on a pro rata basis, by the successor of any bank which is merged into, or whose assets are purchased and its deposit liabilities are assumed by a federally chartered or out-of-state bank during the preceding year. No annual charge shall be collected from a bank which has been in operation for one year or less. The aggregate amount of charges assessed by the division of banks for a fiscal year under the provisions of this section and other applicable fee provisions shall not be less than the aggregate amount of revenues for such fiscal year as estimated for the division of banks or its successor agency in section one B of the general appropriation act for such fiscal year.
The cost of the annual examination or audit of each bank under the supervision of the commissioner shall be paid by said bank and shall include, subject to the limitations herein contained, all monies expended by the commonwealth for personal services and such proportion of the general overhead of the division of banks and loan agencies, including travel, hotel and meal allowances, and other direct and indirect costs, as is determined by the commissioner to be attributable to such examination or audit. Such costs shall include an amount equal to the cost of fringe benefits as established by the commissioner of administration pursuant to section six B of chapter twenty-nine. The charge for each examiner participating in such examination or audit shall be determined annually by the commissioner of administration under the provision of section three B of chapter seven, and shall be paid by each bank within thirty days notice from the commissioner of the charge for such examination or audit. In addition to the foregoing, a charge, also determined under the aforementioned provision, and which shall be based on the total amount of assets held by each bank as stated on the report to the commissioner of banks filed most recent to December thirty-first of each preceding year, may be assessed annually which together with the charge authorized by the preceding sentence will be sufficient to reimburse the commonwealth for the direct and indirect costs of the operations of the office of the commissioner of banks, and each bank shall within thirty days notice from the commissioner of the charge assessed under the preceding sentence, pay to him such charge. Such costs shall include an amount equal to the cost of fringe benefits as established by the commissioner of administration pursuant to section six B of chapter twenty-nine. Said notice shall be issued annually by the commissioner on January thirty-first. No examination charge shall be collected hereunder from a bank which has been in operation for one year or less nor shall a charge in excess of one-half of the amount actually attributable to such examination or audit be assessed against a bank which has been in operation for more than one year but less than two years.
The commissioner or the person making the examination shall, at the time of any such examination, have free access to the vaults, investments, cash, books and papers. In making any examination which in the opinion of the commissioner is necessary, the commissioner shall have access to the vaults, books and papers of each of the bank's affiliates and may make such examination of the affairs of its affiliates as may be necessary to disclose fully the relations between such bank and its affiliates and the effect of this relationship upon the affairs of the bank.
The expense of the examination of the affairs of any affiliate of a bank, determined as provided in this section, shall be paid by the affiliate examined. For the purposes of this section, the term "affiliate'' shall include holding company affiliates, but shall not include any person or corporation the control of which is held by a bank when acting in a fiduciary capacity.
The commissioner shall preserve a full record of each such examination of a bank including a statement of its condition. Such records, and information contained in the reports of such banks, 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, his examiners and assistants, and such other officers of the commonwealth as may have occasion and authority to inspect them in the performance of their official duties. Nothing herein contained shall be construed to prohibit the required production of such records, and information contained in the reports of such banks, before any court of this commonwealth or any master or auditor appointed by any such court, in any criminal or civil proceeding therein pending, affecting such bank, its officers, directors or employees.
Copies of reports of such examinations shall be furnished to such bank 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 his discretion, furnish to the chief national bank examiner, the Federal Reserve Bank of Boston, the Federal Deposit Insurance Corporation, the Depositors Insurance Fund, the Cooperative Central Bank, the Massachusetts Credit Union Share Insurance Corporation, the National Credit Union Administration, the Office of Thrift Supervision, or any successor to such entities, any other bank regulatory or law enforcement agency, or the banking departments of other states or foreign countries, such information, reports and statements relating to the institutions under his supervision as he deems appropriate.
Chapter 167: Section 2. Examination of banks
[ Text of section as amended by 2009, 5, Sec. 5 effective March 19, 2009. For text effective until March 19, 2009, see above.]
Section 2. (a)(1) The commissioner, either personally or by his examiners or such other assistants that he designates, shall, at least once in each calendar year, or at least once in an 18-month period in the case of a bank which is well capitalized as defined in 12 U.S.C. § 1831(o) and the regulations adopted under that section, make a thorough examination of the books, securities, cash, assets and liabilities and ascertain the condition of all banks under the commissioner's supervision, including out-of-state branches, the ability of each bank to fulfill its obligations and whether it has complied with all applicable laws. The commissioner may also, whenever he considers it expedient, make or cause to be made, at the expense of the bank, any further examinations or audits by his examiners or by certified public accountants or public accountants approved by him and subject to his direction and not connected with the bank. The commissioner may also, whenever he considers it expedient, appoint individuals certified as real estate appraisers by the Society of Real Estate Appraisers or a similar successor society to make, at the expense of the bank, appraisals of real estate securing loans of the bank. When the commissioner appoints an appraiser, he shall so notify the bank of the date on which he has requested submission of the appraisal report to him. The bank may then appoint an appraiser who may submit the report of his appraisal to the commissioner on the same date.
(2) The commissioner or the person making the examination shall, at the time of the examination, have free access to the vaults, investments, cash, books and papers. In making an examination, the commissioner shall have access to the vaults, books and papers of each of the bank's affiliates and may make any examination of the affairs of its affiliates that may be necessary to disclose fully the relations between the bank and its affiliates and the effect of this relationship upon the affairs of the bank.
(b)(1) The commissioner shall preserve a full record of an examination of a bank, including a statement of its condition. All records of investigations and reports of examinations by the commissioner, including workpapers, information derived from the reports or responses to the reports and any copies of the records in the possession of a bank under the supervision of the commissioner, shall be confidential and privileged communications, shall not be subject to subpoena and shall not be a public record under clause Twenty-sixth of section 7 of chapter 4. For the purposes of this paragraph, records of investigations and reports of examinations shall include records of investigation and reports of examinations conducted by a financial regulatory agency of the federal government or of a state or a foreign government which are considered confidential by the agency or foreign government and which are in possession of the commissioner. In a proceeding before a court, the court may issue a protective order to seal the record protecting the confidentiality of these records, other than a record on file with the court or filed in connection with the court proceeding, and the court may exclude the public from any portion of the proceeding at which the record may be disclosed.
(2) Copies of reports of these examinations shall be furnished to the bank 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 his discretion, furnish to the Chief National Bank Examiner, the Federal Reserve Bank of Boston, the Federal Deposit Insurance Corporation, the Depositors Insurance Fund, the Cooperative Central Bank, the Massachusetts Credit Union Share Insurance Corporation, the National Credit Union Administration, the Office of Thrift Supervision or any successors to these entities, any other bank regulatory or law enforcement agency, or the banking departments of other states or foreign countries, any information, reports and statements relating to the institutions under his supervision that he considers appropriate.
(c)(1) An annual charge shall be paid by each bank under the supervision of the commissioner which shall be based on the total amount of assets held by each bank as stated on the most recent report to the commissioner filed before December 31 of the preceding year. The charge assessed to all such banks shall be determined based on a calculation of the amount that would be sufficient to pay for the operations of the division of banks in the amount set forth in the division's appropriation for the fiscal year, and each bank shall pay the charge within 30 days after receiving notice from the commissioner of the charge assessed. The notice shall be issued annually by the commissioner on January 31. The charge shall be determined annually by the secretary of administration and finance under section 3B of chapter 7, with the assistance of the commissioner, and may contain such classifications and differentiations based upon the financial condition of such banks as he considers appropriate. Classifications of individual institutions shall be exempt from section 10 of chapter 66. The annual charge shall be paid, on a pro rata basis, by the successor of any bank which is merged into, or whose assets are purchased and its deposit liabilities are assumed by, a federally-chartered or out-of-state bank during the preceding year. No annual charge shall be collected from a bank which has been in operation for 1 year or less. The aggregate amount of charges assessed by the division of banks for a fiscal year under this section and other applicable fee provisions shall not be less than the aggregate amount of revenues for the fiscal year as estimated for the division of banks or its successor agency in section 1B of the general appropriation act for that fiscal year.
(2) If the assessment in a fiscal year by the division of banks is insufficient to pay for the operations of the division of banks in the amount set out in its annual appropriation and any additional appropriations for that fiscal year, the division of banks shall assess the remaining amount upon all depository and nondepository financial institutions under the supervision of the division. This assessment shall be determined by regulations of the secretary of administration and finance under section 3B of chapter 7, with the assistance of the commissioner, and may contain such classifications and differentiations based upon the regulatory condition of each institution as the commissioner considers necessary. The classifications of individual institutions shall be exempt from section 10 of chapter 66. The assessment shall be paid within 30 days after notice from the commissioner of the amount due.
(3) The expense of the examination of the affairs of an affiliate of a bank, including all monies expended by the commonwealth for personal services and the proportion of the general overhead of the division of banks and loan agencies, including travel, hotel and meal allowances and other costs that are determined by the commissioner to be attributable to the examination or audit, shall be paid by the affiliate examined. For the purposes of this section, "affiliate'' shall include holding company affiliates, but shall not include any person or corporation the control of which is held by a bank when acting in a fiduciary capacity.