The John Adams Courthouse, seat of the Massachusetts Supreme Judicial Court. iStock photo

Rent control isn’t formally on the ballot yet in Massachusetts, but one local bank is letting it be known that its future could be in question if the proposal were to pass in November.

If the proposed rent control ballot question passes, a little under a fourth of Millbury National Bank’s loan portfolio covers properties that would be subject to the measure, according to bank President and CEO John Latino.

“Millbury National would have to dramatically reduce or eliminate lending activities” if rent control passes, President and CEO John Latino wrote in an affidavit submitted to the Massachusetts Supreme Judicial Court alongside an amicus brief filed in a lawsuit by rent control opponents.

Regulators would also subject the bank to frequent inspections, and could ultimately force the 201-year-old Millbury National to merge with a larger bank if it was in danger of failing, he wrote.

The lawsuit Latino’s brief was filed in claims the proposed rent control ballot question is unconstitutional. The proposed ballot question would ban rent increases greater than the rate of inflation in rental units older than 10 years. Owner-occupied buildings with one to four units would be exempt.

The suit before the state Supreme Judicial Court is backed by a coalition of interest groups, landlords and advocates opposed to the ballot question.

Rent Increases from Renovations

In 2025 alone, Millbury originated 27 loans totaling $11.76 million on properties that would be impacted by rent control, the brief and Latino’s affidavit state. These loans make up 25 percent of all loans that the bank originated in 2025 and 11 percent of its total loan portfolio.

Millbury National Bank does not sell any of its loans, and they are primarily adjustable-rate mortgages, according to Latino. If the ballot measure were to pass, landlords’ cash flows would be affected, therefore affecting their ability to pay back the loan, he wrote. Many of its loans were underwritten on the assumption that rents would increase in between tenants, as units are renovated, but increases planned by its borrowers are greater than what would be allowed under rent control. If the loans were to default, Millbury National could fail, Latino wrote.

The bank is a “go-to lender” for many who invest in small multifamily properties in Central Massachusetts, Latino wrote.

“A lot of our customers are smaller landlords,” Latino said in an interview Friday. “They have, typically, just a small amount of properties – maybe one or two or three investment properties. A lot of them also have full-time jobs. This is often something that they get into as either a side endeavor, or even a few of our customers have [it] as their primary endeavor. Our customer base is not multi-million dollar corporations. These are community members that live and work in this community, and they’re proud to be landlords, proud to take care of their properties.”

Carolyn Chou, head of the Homes For All Massachusetts coalition backing the ballot question, said the group’s proposal is focused on larger landlords, as many owner-occupied units would be exempt from the policy.

“The average person who owns a two- or three-family would be exempted from this policy,” she said. “In general, we believe this is really about the large rent increases we see, particularly in corporate landlords. Most landlords are not raising the rent huge amounts, year over year.”

Concern for More Community Banks

There are also concerns regarding how this ballot measure would affect community banks as a whole, perhaps forcing smaller lenders to consolidate to ride out any financial fallout.

“We are a 201-year-old independent bank, and our primary strategic objective is to remain independent,” Latino said. “So we are very prudent when it comes to managing our risk. We are a well-capitalized bank, and we’ve overcome a lot of challenges in the last 201 years. I would like to think we’ll continue to overcome challenges, but this would certainly be a challenge.”

To date, few local banks have spoken out about the ballot question. But Rockland Trust executives told stock analysts recently that the possibility rent control could appear on the November statewide ballot has dramatically suppressed borrowers’ appetites for multifamily construction loans.

Beyond banks, there will also be impacts to the broader market and housing values in Massachusetts, said Conor Yunits, chair of the committee opposing the rent control ballot question.

“A recent study from Tufts found that rent mandates will eliminate $300 billion in property values over the next decade – and that loss of value will be felt by cities and towns, small property owners, and the community banks that lend to them,” he said in a statement. “Despite what the proponents claim, this ballot question will have negative financial implications for virtually every voter in Massachusetts.”