Permissibility Of Federal Credit Union Considering Conversion To A State Charter In Another State To Open A Branch Office Or Electronic Kiosk - Q2 1999

By the Division of Banks

A federal credit union considering conversion to a state charter outside of Massachusetts seeks to open a branch office or electronic kiosk branch in Massachusetts. Mass. Gen. Laws chapter 167, section 39C allows a foreign bank, out-of-state bank, or out-of-state federal bank to maintain a branch de novo in the Commonwealth. It has been the Division's position that only those entities listed in the statute be permitted to establish and maintain a de novo branch office. Out-of-state credit unions are not listed therein, nor does there exist a provision in Mass. Gen. Laws chapter 171, which governs state-chartered credit unions, for an out-of-state credit union to establish or maintain a branch office within Massachusetts' borders. Mass. Gen. Laws chapter 167B governs electronic branches ("ATMs"). Section 3 of said chapter 167B does allow out-of-state institutions to establish ATMs subject to reciprocity as well as application to and approval by the Division.