Clarification Of Shareholder Voting Rights - Q3 1999

By the Division of Banks

A mutual co-operative bank seeks clarification with respect to two matters relative to the shareholder voting requirements set forth in Mass. Gen. Laws chapter 170, section 8 as applicable to a proposed merger. It is the opinion of the Division that a joint account holder of a mutual co-operative bank who does not vote on behalf of the joint owner is entitled to vote in another capacity if that depositor maintains a separate account from which he or she is deemed a shareholder for the purposes of casting a vote. Section 26A governs the merger of a mutual co-operative bank with and into a mutual savings bank, but does not address the specifics of shareholder voting. However, said section 8 is applicable to such voting providing, in pertinent part, that "no person shall vote by proxy except as otherwise may be expressly authorized by law." Accordingly, it is the long standing position of the Division that a shareholder of a mutual co-operative bank may not vote by proxy.