Permissibility to Offer Bank Customers a Courier Service through an Independent Third Party Courier Service - April 2, 2002

By the Division of Banks

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April 2, 2002

Dana M. Neshe
Vice President
Middlesex Savings Bank
36 Summer Street
Natick, MA 01760

Dear Ms. Neshe:

This letter is in response to your correspondence of March 19, 2002 to the Division of Banks (the "Division") inquiring as to whether it would be permissible for Middlesex Savings Bank (the "Bank") to offer its commercial customers a courier service through an independent third party courier service.

Massachusetts General Laws chapter 167F, par. 2(31) provides authority for state-chartered banks to exercise additional or more flexible powers parallel to those granted to national banks under Federal law, to the extent that such powers are not otherwise prohibited by State law. The Division promulgated regulations under this authority at 209 CMR 47.00 et seq. titled "Parity with National Bank". To exercise authorities under said 209 CMR 47.00, a bank is required to submit a written request for approval to the Division including pertinent information demonstrating the bank's satisfaction of the specified eligibility requirements.

The authority to establish a messenger service is at 209 CMR 47.07(3)(a)2. A bank may establish and use a messenger service to transport items relevant to the bank's transactions with its customers without regard to branching limitations, provided such service does not receive deposits, pay checks, or lend money and such service is established and operated by an independent third party.

You state that the Bank intends to hire a bonded third party courier service that would travel to various customer locations, accept deposits, and then bring these deposits to the closest branch of the Bank. The Bank would pay for the service. As stated above, to be permissible under the regulation, a service provider cannot, among other things, receive deposits. Such a service would be permissible provided the deposits are received by the Bank at an authorized location of the Bank. The Bank may defray all or part of the costs incurred by a customer in transporting items through a messenger service. See 209 CMR 47.07 (3)(a)2.c.

You should review all relevant provisions of 209 CMR 47.00 prior to submission of a request for approval. Any such request should be submitted directly to the Commissioner of Bank.

Sincerely,

Joseph A. Leonard, Jr.
Deputy Commissioner of Banks
And General Counsel