HarborOne Bid Triggers More Debate
The proposed conversion of the $1.8 billion HarborOne Credit Union to a mutual bank triggered fresh industry debate last week about the impact and efficacy of conversions as the Brockton, Mass., CU formally tendered its resignation from CUNA and the Massachusetts Credit Union League.
Action by the HarborOne board on the planned conversion to a cooperative bank charter could come as early as March 21 at the conclusion of an initial member comment period, according to the CU’s regulatory notice posted Feb. 16 on its website.
"Unless the tax exemption is lost, I don't believe the recent conversion announcements, while newsworthy, are the beginning of a major sustained trend that will signal the end of the credit union industry as we know it,” said Dollar.
“Over the past 15 years or so, there have been about 35 conversions out of about 10,000 credit unions,” he said, making bank conversions average about two a year since 1995.
Regarding HarborOne specifically, Washington attorney Steve Bisker, a former NCUA assistant general counsel, questioned the CU’s intentions and its basis for converting after looking at its preliminary online notice filed with regulators.
“The stated ‘consequences of conversion’ are inaccurate or misleading at best,” charged Bisker, pointing to what he said are inconsistencies on its need for more capital to lend and the credit union’s prospects for increased membership under a mutual charter.
Perhaps this is anecdotal evidence suggesting there could be an increase in conversions over the next five to 10 years, he concluded.
CEOs at several Massachusetts CUs said they were taken by surprise by the HarborOne conversion bid, but it has not altered their plans to stick to the CU charter, which they view as imperfect but workable.