Members of the $1.8 billion HarborOne Credit Union in Brockton, Mass., have approvedconverting its 96-year-old credit union into a mutual co-operativebank charter.

“HarborOne members voted to approve the charter change,” JamesRice, HarborOne's vice president of marketing, said Monday. “Nearly62% of voting members cast their ballots in favor of theproposal.”

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Operating as a credit union since 1917, HarborOne has grown tobecome the largest state-charted credit union in New England.Nevertheless, the longstanding credit union has said its reasons toconvert were the flexibility to expand HarborOne's markets andcustomer base, increase its lending authority, including smallbusiness lending, and gain access to additional capital.

HarborOne's 139,078 members were mailed ballots on Feb.19. Eligible members cast their ballot by postage-paid returnmail, placed the confidential ballot envelope in a lockbox at oneof the CU's fourteen branches, or voted in person during a special meeting March 11.

HarborOne's President/CEO James Blake has told Boston media thatbecause HarborOne's field of membership is limited to fourcounties, the credit union has been forced to turn down $70 millionin mortgages and other consumer loans from potential members wholive outside its market.

But soon after the conversion plan was announced Feb. 16, 2012,and approved by HarborOne's board a month later, it sparked anindustry-wide debate and criticism from some credit unionleaders.

Steve Bisker in Washington, D.C., disputed HarborOne'sreasons for mulling the move, saying HarborOne was at only 20% ofits member business lending cap, based on his examination ofHarborOne's preliminary online notice filed with regulators.

“The stated 'consequences of conversion' are inaccurate ormisleading at best,” Bisker told Credit Union Times inMarch 2012, pointing to what he said are inconsistencies onHarborOne's stated need for more capital to lend and its prospectsfor increased membership under a mutual charter.

But industry analysts argued credit union frustration over NCUAassessments coupled with the inability to raise capital and expandbusiness lending to compete with banks apparently helped spurHarborOne CU's proposal to convert to a bank.

“Margins have been pretty thin for awhile now and credit unionssee no way to build capital and they don't like paying thoseassessments while seeing so much uncertainty ahead,” Alan Theriaultof Portland, Maine, a conversion specialist, told the CreditUnion Times in February. He also said that at least onebillion-dollar CU was ready to make the switch and so were a handful of $200-$400 millionCUs.

Richard S. Garabedian, a partner at the Luse Gorman Pomerenk& Schick law firm in Washington, D.C., said, “I'd say thecorporate crisis and the sense of many credit unions feeling boxedin” by the onslaught of new regulations and tighter NCUA examrestrictions triggers moves like HarborOne.

Except for the $1.4 billion Technology CU of San Jose, Calif.and a few smaller CUs with conversion plans, there has been a lullin activity, but the trend may be about to change, Garabedian saidin a Credit Union Times article last February. Nevertheless, members of Technology CU overwhelming rejectedto convert their institution to a mutual bank in September. Of the total 18,000 votes cast, 14,000 voted no to the conversionand 4,000 voted in favor of it.