“Changes Affecting Massachusetts Credit Union Branching”

On January 7, 2015, former Governor Deval Patrick signed legislation permitting Massachusetts credit unions to establish branches in the other five New England states and New York, subject to certain limitations and requirements.

January 2015

On January 7, 2015, former Governor Deval Patrick signed legislation permitting Massachusetts credit unions to establish branches in the other five New England states and New York, subject to certain limitations and requirements. There were 76 Massachusetts credit unions as of December 31, 2014.

The legislation, known as “An Act Relative to Credit Union Branching” (the “Act”), amends Chapter 171 of the Massachusetts General Laws to authorize Massachusetts credit unions to establish one or more branches in these states, provided that the branch is located within 100 miles of the credit union’s main office in Massachusetts, and subject to the prior approval of the Massachusetts Commissioner of Banks. Under the Act, credit unions are limited to one out-of-state branch application to the Massachusetts Commissioner of Banks in any 12-month period.

Under current law and policy of the Massachusetts Commissioner of Banks, branches of a Massachusetts credit union must be located either in the county where the credit union’s main office is located or within 50 miles of the credit union’s main office in a city or town in another county in Massachusetts.

The Act also contains provisions granting credit unions having a principal place of business in one of the other five New England States or New York the right to establish branches in Massachusetts, if the laws under which it was organized permit it and the laws of the other state grant reciprocal rights to Massachusetts credit unions. The prior approval of the Massachusetts Commissioner of Banks is also required.

Rhode Island law, for example, contains a similar provision, which permits a credit union chartered in another state to do business in Rhode Island if, in the determination of the Director of the Rhode Island Department of Business Regulation, the laws of the other state provide reciprocal rights to Rhode Island credit unions.

These changes in Massachusetts law take effect on October 1, 2015. The Act requires the Massachusetts Commissioner of Banks to promulgate rules and regulations implementing the Act no later than July 1, 2015.  

Please contact Robert Tammero or Patricia Antonelli with questions.


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