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The purpose of this bulletin is to provide the standard for determining when a mutual savings bank or co-operative bank is deemed to meet certain mandatory regulatory eligibility requirements for a supervisory stock conversion under Subpart B of 209 CMR 33.00. The specific eligibility requirement addressed by this directive is 209 CMR 33.16(c).
The governing regulation requires a determination by the Division of Banks (Division) that "upon liquidation of the bank . . . there would be no equity value realizable by the [bank’s] mutual account holders." This phrase is being further clarified in order to permit undercapitalized state-chartered mutual institutions to utilize the supervisory stock conversion provisions of 209 CMR 33.00 as a means of raising additional capital. Accordingly, the Division hereby adopts the following standard for determining compliance with 209 CMR 33.16(c).
For the purposes of 209 CMR 33.16(c), mutual account holders will be deemed to have no equity value realizable upon liquidation of the bank if the applicant bank:
The burden is upon the applicant bank to demonstrate that the preceding standard is met as well as all other requirements of Subpart B of 209 CMR 33.00.
This bulletin was first issued and became effective on October 29, 1992 as Administrative Bulletin 34-1. The bulletin was revised on May 8, 2012.
G.L. c. 168, s. 34C; G.L. c. 170, s. 26C; and 209 CMR 33.00, Subpart B; 12 CFR 325.