This text of Massachusetts § 67B (Investment in shares of stock registered on a national securities exchange or for which quotations are available through the financial Industry Regulatory Authority, Inc., or any comparable service; application to commissioner for prudent person authority; due diligence) is published on Counsel Stack Legal Research, covering Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Section 67B. Upon a 2/3 vote of its board of directors, a credit union which has strong management, is well-capitalized and has at least a satisfactory rating at the most recent community reinvestment examination conducted by the commissioner pursuant to section 14 of chapter 167 may apply to the commissioner to invest in shares of stock registered on a national securities exchange as provided in the Securities Exchange Act of 1934, 15 U.S.C.
78a, or for which quotations are available through the Financial Industry Regulatory Authority, Inc. or any comparable service designated by the commissioner; provided, however, that the investment shall be made in the exercise of the judgment and care consistent with the prudent person rule as provided in this section. In making the application to th
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Section 67B. Upon a 2/3 vote of its board of directors, a credit union which has strong management, is well-capitalized and has at least a satisfactory rating at the most recent community reinvestment examination conducted by the commissioner pursuant to section 14 of chapter 167 may apply to the commissioner to invest in shares of stock registered on a national securities exchange as provided in the Securities Exchange Act of 1934, 15 U.S.C. 78a, or for which quotations are available through the Financial Industry Regulatory Authority, Inc. or any comparable service designated by the commissioner; provided, however, that the investment shall be made in the exercise of the judgment and care consistent with the prudent person rule as provided in this section. In making the application to the commissioner for prudent person authority, the credit union shall also have adequate policies and procedures governing the performance of the activity by the credit union and its employees to minimize any credit, market, liquidity, operational, legal and reputational risks to the credit union. A credit union shall submit other information the commissioner may consider necessary to properly evaluate an application. The commissioner may consider any other information available to the division of banks in determining whether to approve or reject an application. Approval granted by the commissioner shall be subject to conditions and limitations as the commissioner may impose.A credit union may apply to invest up to 20 per cent of its assets under this section. The percentage of assets authorized shall be determined by the commissioner. The commissioner may increase, modify, curtail, rescind or otherwise limit a credit union's authority to make the investments.Before making any investment under this section, a credit union shall conduct an appropriate level of due diligence to determine if an investment shall be both permissible and appropriate and may include both internal and external analysis. For debt instruments, the analysis shall not rely solely on 1 or more credit rating agencies and the credit union shall determine that the instrument has both a low risk of default by the obligor and that the full and timely repayment shall be expected over the expected life of the investment.A credit union shall take into consideration the following:(i) when considering the purposes, terms and other circumstances of the credit union, including those set forth in this section, whether the investment would meet the prudent person rule where the credit union shall exercise reasonable care, skill and caution in making its investments and management decisions;(ii) whether the investment or management decision shall be consistent with an overall investment strategy reasonably suited to the credit union;(iii) consideration of circumstances relevant to the credit union in investing and managing its assets, including: general economic conditions; the possible effect of inflation or deflation; the role that each investment or course of action plays within the overall credit union investment philosophy; the expected total return from income and the appreciation of capital; other resources of the credit union; needs for liquidity, regularity of income and preservation or appreciation of capital; and an asset's special relationship or special value, if any, to the purposes of the credit union;(iv) whether facts relevant to the investment and management of its assets may be reasonably verified;(v) whether the investment or management decision shall reasonably diversify the investments of the credit union to bring the credit union's portfolio into compliance with the purposes, terms and the other circumstances of the credit union and the requirements of this section; and(vi) the costs of any decision in investing and managing credit union assets and whether the costs shall be appropriate and reasonable in relation to its assets.The investments pursuant to this section shall not exceed 20 per cent of the credit union's assets.The investments shall be subject to annual review by the board of directors of the credit union and shall be subject to periodic review by the division of banks during the course of examinations pursuant to section 2 of chapter 167.