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This opinion was issued in the first quarter of 1999.
The Division's Regulatory Bulletin 2.1-102, Section III A1, clarifies the provisions of the General Laws governing loans to insiders and the applicable federal provisions of Regulation O. The Bulletin generally provides for the more stringent or restrictive provision of the Bulletin or Regulation to control. M.G.L. ch.168, s.19 prohibits preferential rate of interest or preferential terms on any loan or extension of credit to an officer, director, or trustee of a state-chartered savings bank. Section III 4 of the Bulletin contains two matters relative to preferential terms and conditions: 1) consistent with statute, a prohibition to the extension of credit to officers, directors or trustees upon preferential terms and conditions, and 2) a definition of "preferential terms and conditions" referring to provisions of 12 CFR 215.4. A review of the federal provisions would appear to allow a benefit or compensation program which is widely available to employees and does not give preference to insiders, as defined in 12 CFR 214.2(h), over employees. Applying the standard set forth in the Bulletin, it is the position of the Division that the bank may only provide such interest-free loans to employees and those officers of the bank who are not directors and not covered by the definition of officer as set out in said section 19.