Regulatory Bulletin  Regulatory Bulletin Update 2022

Date:	10/07/2022
Referenced Sources:	Regulatory Bulletins issued by the Division of Banks

The Division of Banks (Division) is issuing the following updates to its Regulatory Bulletins largely to implement Chapter 338 of the Acts of 2020, An Act Modernizing the Credit Union Laws (Credit Union Modernization), and to clarify additional provisions included in the Bulletins as follows:

Banks, Credit Unions, and Licensees

Regulatory Bulletin 1.1-101: Examination Policy:

The amendments to Regulatory Bulletin 1.1-101: Examination Policy update this Bulletin to formalize the Division’s position that the recording of examination exit and board meetings by any means by banks, credit unions, licensees, and registrants is strictly prohibited.

Banks and Credit Unions

Regulatory Bulletin 2.1-104: Branch Office Notice and Application Procedures:

Regulatory Bulletin 2.1-104 is being updated to reflect changes to M.G.L. c. 171 set forth in Credit Union Modernization.  While amending this Bulletin for Credit Union Modernization, the Division also made additional updates to clarify certain requirements, as set forth below.

The updates reflecting the amendments in Credit Union Modernization are as follows:

Credit Union Investment in Fixed Assets:

Amending this Bulletin to reflect that if a credit union’s investment in a proposed branch results in the credit union’s aggregate investment in fixed assets for the transaction of its business to exceed 5% of shares and retained earnings as set forth in M.G.L. c. 171, s.  75, the credit union must submit a separate request for approval from the Division as part of its branch notice letter.  Prior to enactment of Credit Union Modernization, if a credit union intended to invest more than $1 million in land, building, improvements and equipment, the credit union would have to provide notice to the Commissioner pursuant to 209 CMR 50.06(3)(e).

Reduced Fee for Banks Establishing a Branch:  Changing the amount of the fee that banks must pay to establish a branch to $500.  Now both banks and credit unions seeking to establish a branch are required to pay the same fee of $500.  (The fee for the establishment of a bank branch formerly was $1,000.)

Other updates to this Bulletin include a clarification regarding exclusive leases, what constitutes a relocation, and notice procedures, as follows:

• Exclusive Leases:  Amending this Bulletin to specifically refer to the Division’s Regulatory Bulletin 2.2-103: Insider Transactions for the Division’s position regarding exclusive leases and other restrictive agreements.
• Relocations:  Amends this Bulletin to clarify that a relocation also applies if a bank or credit union is moving the premises of a branch or its main office to a different location at the same address, and the process for such relocation.
• Notice Procedures: Amends this Bulletin to clarify certain notice provisions, including the following:
  • Clarifying the requirements of submitting a letter notice to establish a branch office to the Division;
  • Clarifying that public notice is required for a bank or credit union to close a branch office; relocate a branch office; and to establish a branch through a purchase and assumption of another bank; and 
  • Adding a provision that comments can also be submitted to the Division’s electronic address for comments at [e-mail].
• Additional updates: Amends this Bulletin to add certain information to be submitted with a bank or credit union’s notice or application.

 

Regulatory Bulletin 2.1-106: Guidelines for “18-65” Accounts for Banks and Credit Unions:

For several decades, state-chartered banks have been required to offer certain checking and savings accounts to individuals 18 years old and younger and to individuals 65 years and older, known as 18-65 accounts, most recently pursuant to G.L. c. 167D s. 5 and Regulatory Bulletin 3.3-101.  Credit Union Modernization made similar provisions regarding 18-65 accounts applicable to state-chartered credit unions in new G.L. c. 171, s. 32B.  The updates to newly issued Regulatory Bulletin 2.1-106 make so-called 18-65 requirements generally applicable to credit unions. 

Note: The current Regulatory Bulletin 3.3-101: Guidelines for “18-65” Accounts (for banks only) will be rescinded.

The changes reflected above are effective immediately.

Credit Unions

Regulatory Bulletin 4.1-104: Amending By-Laws in Regard to Credit Union Membership:

Regulatory Bulletin 4.1-104: Amending By-Laws in Regard to Credit Union Membership is being amended to reflect changes set forth in Chapter 338 of the Acts of 2020 (Credit Union Modernization).

The main amendments pursuant to Credit Union Modernization include the following:

• Amending this Bulletin to reflect that credit unions may now limit in their bylaws the number of employees who may serve on the credit union’s board of directors pursuant to G.L. c. 171, s. 12; 
• Amending this Bulletin to reflect that the Commissioner’s approval is no longer necessary for amendments to the bylaws in order to change the credit union’s name or location of a branch pursuant to G.L. c. 171, s. 10.  Note:  A credit union must still receive the written consent of the Commissioner to change the location of its main office under G.L. c. 171, s. 8.  In addition, Division requests that a credit union seeking to change its name, or use a d/b/a, send a courtesy notification to the Division; and
•  Amending this Bulletin to reflect that a credit union now has the option of amending its bylaw to authorize members to vote by electronic means in annual and special meetings.  There are additional related amendments authorizing such voting for those present or otherwise participating and entitled to vote on the specific matters pursuant to G.L. c. 171, s. 11.

The changes reflected above are effective immediately.