Citing HAR-CO Conversion, Maryland Bankers Assail Credit Union Mergers
Taking a swipe at credit union mergers, Maryland bankers on Tuesday suggested the planned conversion of the $187 million HAR-CO Maryland Federal Credit Union of Bel Air to a mutual bank should now become a business model for large credit unions.
“Those aggressive credit unions in our state which function like banks and don’t pay taxes should consider adopting the HAR-CO formula,” declared Kathleen Murphy, CEO of the Maryland Bankers Association.
Elaborating on remarks made to a Baltimore business journal, Murphy said a series of Maryland credit union mergers underscore the unchecked growth of the very largest, pointing to the need for these credit unions to halt bank-like practices and apply for a bank charter.
She cited, in particular, the latest merger bid by the $2.2 billion State Employees Credit Union of Linthicum to consolidate the $82.4 million Anne Arundel County Employees FCU as an example of a credit union taking advantage of its tax-exempt status.
Rod Staatz, the president/CEO and a newly elected CUNA officer, was not immediately available for comment on the MBA broadside.
Staatz had said earlier this month the merger proposal for Anne Arundel fits into a SECU strategic plan for expansion by the state’s second-largest credit union, absorbing a credit union where there is a cultural fit.
HAR-CO had said in a second-quarter report to members that it might get final clearance for the conversion by this Sunday. That date looks unlikely now since a spokeswoman at the credit union said HAR-CO was still awaiting final approval “by the auditors” before it can legally become a mutual. There was no indication when that might occur.