ICBA Objects to Mass. Bill on Mutual Bank Conversions
ICBA has objected to Massachusetts Senate Bill 26, which would require mutual banks and mutual holding companies to distribute all of their capital to depositors pro rata when converting to the stock form of ownership.
In a letter to the chairmen of the Massachusetts Joint Committee on Banks and Banking, ICBA said the legislation would "irreparably harm mutual banks and the communities in which they serve." While ICBA supports the right of mutual banks to convert to stock ownership, the decision to convert should be made by bank management for appropriate business reasons, and free of pressure from depositors seeking only a windfall with no regard for the bank's long-term strategic interest. ICBA said the current conversion process as developed by the FDIC is fair to all parties, including depositors, and does not need to be changed.