The $187 million HAR-CO Maryland Federal Credit Union appears poised to become a mutual bank by April 1.
In a website posting, the suburban Baltimore CU forecast that its “member-approved conversion to a bank charter will be complete by the end of the first quarter” noting that if it is completed the existing director slate would be dissolved.
“The board of directors for the new bank entity has already been appointed for the first year of operation and it would essentially have the same people,” said a newsletter notifying the members of HAR-CO’s annual meeting slated for March 21 at its headquarters in Bel Air, Md.
For the time being, the 20,000-member HAR-CO said in its statement that it is operating under its current federal CU charter.
"The members of HAR-CO approved the charter change proposal with over 58% of voting members casting ballots in favor of the proposal, and with over 5,000 of our members exercising their right to vote on the proposal," the statement said.
In a related development, the Maryland/DC Credit Union Association confirmed that HAR-CO formally resigned its league/CUNA membership last June.
“It’s always a concern when we witness a disaffiliation like HAR-CO but that is part of the democratic process in this movement,” said John Bratsakis, president/CEO of the MDDCCUA.
“It is equally important,” he stressed, “that full disclosure be made to members so they fully understand their rights and the intent of management be evaluated.”
The former Illinois CU executive who took over as league head last October maintained that despite the HAR-CO switch and two other conversion bids under way by large CUs in Massachusetts and California, any trend toward wholesale conversions remains illusory.
“I’ve heard this talk the last 20 years about this large bubble coming at us but in my view it still remains just a handful of credit unions in pursuit,” said Bratsakis. On the contrary, he said, more CUs are seeking ways to take advantage of existing benefits of the CU charter and inquiring of leagues like his to make use of them.
On that score, Bratsakis said his league is now enjoying five re-affiliations in 2012. “These include credit unions which range in size all the way up to $500 million,” said Bratsakis, a former senior vice president of the $1.5 billion Baxter CU near Chicago and CEO of the $181 million Community Trust CU of Gurnee, Ill.
Regarding HAR-CO, Baltimore media noted that its switch to a mutual bank charter would be the first in Maryland since 1998. That’s when Owings Mills’ BUCS FCU became BUCS Bank, subsequently purchased by Susquehanna Bank in 2007, said news accounts.