By the Division of Banks

Assets Qualifying For Co-operative Bank Minimum Reserve Requirements

Co-operative banks must maintain at least 6½% of their share liability as a minimum reserve to meet withdrawals of shares and accounts, and applications for loans on shares and accounts, and payments of taxes received from mortgagors under Mass. Gen. Laws chapter 170 § 22. Such reserve may consist of investments listed in the statute including bonds and certain obligations of the United States; bonds and notes of the Commonwealth or any political subdivision; and certificates of deposit. State-chartered banks are examined by the Division of Banks on a consolidated basis along with their wholly-owned subsidiaries pursuant to Mass. Gen. Laws chapter 167F § 2(7). Thus, it is the position of the Division that assets qualifying under Mass. Gen. Laws chapter 170 § 22 and transferred by a co-operative bank to its wholly-owned securities subsidiary will be calculated towards the bank's minimum reserve requirements.

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