Section 4. (a) There is hereby established a body politic and corporate to be known as the Massachusetts Educational Financing Authority, herein called the Authority. The Authority is constituted a public instrumentality and the exercise by the Authority of the powers granted by this chapter shall be deemed and held to be the performance of an essential public function. The Authority shall consist of nine members who shall be residents of the commonwealth, not more than five of whom shall be members of the same political party. Seven members shall be appointed by the governor. At least four of the members shall be trustees, directors, officers or employees of public or private institutions for higher education in the commonwealth. At least three of the members shall be persons having a favorable reputation for skill, knowledge and experience in the fields of state and municipal finance, banking, law or investment advice or management. The other two members of the Authority shall be the director of economic development ex officio and the commissioner of administration ex officio, or their designees. The members of the Authority first appointed shall serve for terms expiring on July first in the years nineteen hundred and eighty-three, nineteen hundred and eighty-four, nineteen hundred and eighty-five, nineteen hundred and eighty-six, nineteen hundred and eighty-seven, and nineteen hundred and eighty-eight, respectively, the term of each such member to be designated by the governor. The term of each ex officio member shall be concurrent with his tenure in that office. Upon the expiration of the term of any originally appointed member his successor shall be appointed for a term of six years. The governor shall fill any vacancy for the remainder of the unexpired term. Any member of the Authority may be removed by the governor for misfeasance, malfeasance or wilful neglect of duty or other cause after notice and a public hearing unless such notice and hearing shall be expressly waived in writing. Members of the Authority may serve for successive terms of office.

(b) The Authority shall annually elect one of its members as chairman and one as vice-chairman. It may appoint an executive director and assistant executive director, who shall not be members of the Authority, who shall serve at the pleasure of the Authority. They shall receive such compensation as shall be fixed by the Authority.

(c) The executive director or assistant executive director or other person designated by resolution of the Authority shall keep a record of the proceedings of the Authority and shall be custodian of all books, documents and papers filed with the Authority, the minute book or journal of the Authority, and its official seal. Said executive director or assistant executive director or other person may cause copies to be made of all minutes and other records and documents of the Authority and may give certificates under the official seal of the Authority to the effect that such copies are true copies, and all persons dealing with the Authority may rely upon such certificates.

(d) Five members of the Authority shall constitute a quorum. The affirmative vote of a majority of all the members of the Authority shall be necessary for any action taken by the Authority. A vacancy in the membership of the Authority shall not impair the right of a quorum to exercise all the rights and perform all the duties of the Authority. Any action taken by the Authority under the provisions of this chapter may be authorized by resolution at any regular or special meeting, and each such resolution shall take effect immediately and need not be published or posted.

(e) Before the issuance of any bonds or notes under the provisions of this chapter, the chairman, vice-chairman, executive director and assistant executive director and any other member of the Authority authorized by resolution of the Authority to handle funds or sign checks of the Authority shall execute a surety bond in the penal sum of fifty thousand dollars, or in lieu thereof the chairman shall obtain a blanket position bond covering the executive director and every member and other employee of the Authority in the penal sum of fifty thousand dollars. Each such bond shall be conditioned upon the faithful performance of the duties of the principal or the members, executive director and other employees, as the case may be, shall be executed by a surety company authorized to transact business in the commonwealth as surety, shall be approved by the attorney general and shall be filed in the office of the state secretary. The cost of each such bond shall be paid by the Authority.

(f) The members of the Authority shall receive no compensation for the performance of their duties hereunder but each such member shall be paid his necessary expenses incurred while engaged in the performance of such duties.

(g) Any member, officer, agent or employee of the Authority who, directly or indirectly, has any financial interest in any organization participating in any program of the Authority shall be punished by a fine of not less than fifty dollars nor more than one thousand dollars, or by imprisonment for not more than one month, or both.

(h) Notwithstanding any provision of chapter two hundred and sixty-eight A, a present or former employee of the commonwealth, or of any political subdivision thereof, or of any state, county or municipal agency as defined in said chapter two hundred and sixty-eight A may be a borrower of an education loan. Nor shall participating institutions for higher education be subject to the provisions of section ninety-six of chapter one hundred and forty.

Notwithstanding the provisions of paragraph (g) or the provisions of any other law to the contrary, it shall not be or constitute a conflict of interest or violation of the provisions of said paragraph (g) or the provisions of any other law for a trustee, director, officer or employee of a participating institution for higher education or for a person having the required favorable reputation for skill, knowledge and experience in state and municipal finance to serve as a member of the Authority; provided, in each case to which provisions are applicable, such trustee, director, officer or employee of such participating institution for higher education abstains from discussion, deliberation, action and vote by the Authority in specific respect to any undertaking pursuant to this chapter in which such participating institution for higher education participates in an education loan, or otherwise has an interest, or any such person having the required favorable reputation for skill, knowledge and experience in state and municipal finance abstains from discussion, deliberation, action and vote by the Authority in specific respect to any sale, purchase or ownership of bonds or education loans of the Authority in which the investment banking firm or insurance company or bank of which such person is a partner, officer or employee has a past, current or future interest.