The Massachusetts Credit Union League took a dim view of HarborOne Credit Union’s announcement earlier Thursday that it was considering converting to a bank charter.
In a statement, the league stressed that it is important for credit unions to consider the interests of their members first and foremost.
“The league strongly believes the member-owned, not-for-profit credit union charter is the charter of choice for providing the public with consumer-friendly financial products and service,” said league President Daniel F. Egan Jr.
“While a credit union’s management may appreciate the operational advantages of a bank charter, those benefits must extend to the credit union’s members,” said Egan. “Any charter conversion should be approached from the perspective of what is best for the credit union’s member-owners.”
The Massachusetts League said it understands that, under current laws and regulations, credit unions operate under more restrictions than banks. In particular, credit unions lack access to alternate sources of capital, face higher net worth requirements, are more restricted in business lending and serve a defined field of membership, the statement said.
“These issues are real and indicative of the challenges that credit unions face as they seek to meet the modern needs of today’s consumers,” said Egan. “It is vitally important that legislators and regulators pay heed to these challenges and work to adopt new laws and regulations which keep the credit union charter viable.”
Egan indicated that the historical foundation of the credit union movement provides the rationale for modernizing credit union laws. The credit union “mission is more vital than ever, and lawmakers must give credit unions the tools they need to accomplish that mission.”
HarborOne’s board posted a website message to members that said the board may consider adopting a mutual bank charter. The board asked members to send comments on the issue and added that it would further consider the issue late next month.