Richard S. Garabedian, a Washington attorney who specializes incredit union charter conversions, doesn't think HarborOne Credit Union's conversion to a state co-operativebank, approved by its members Monday, will trigger a wave of creditunion charter conversions.

“Every credit union conversion is unique,” said Garabedian. “ButI don't think it means you are going to see a wave of charterconversions. It's hard to predict what impact it will have but itmay give some credit unions an incentive to look at the charteroption because this one was passed by member.”

But he also noted that other charter conversions have failed.For example, the members of the $1.7 billion Technology CU in San Jose, Calif.,voted overwhelmingly not to convert to a mutual bank in 2012.

And even though members of the $187 million HAR-CO FederalCredit Union in Bel Air, Md., approved the CU's plans to convert toa mutual bank, it pulled its application to convert last year.

On Monday, the $1.9 billion HarborOne CU in Brockton, Mass.,announced members approved the charter change proposal with nearly62% of its 22,433 voting members casting ballots in favor of theproposal.

The Bay State's largest state-chartered credit union has saidits reasons to convert were the flexibility to expand HarborOne'smarkets and customer base, increase its lending authority,including small business lending, and gain access to additionalcapital.

However, longtime credit union attorney Steven R. Bisker ofAlexandria, Va., said members who voted for the conversion were notvoting for their own best interest. He argued that NCUA data hasconsistently shown that when a credit union converts to a bank, therates charged for loans and the rates paid for savings are not asgood as when they were operating as a credit union.

“If my credit union were to say to me that it wanted to convertto a bank, why would I want that? I am taking advantage of mycredit union's services because they offer things to me that mybank doesn't,” Bisker said. “Why would I want to make my CU a bank?The reason why I'm doing business with my credit union is becauseit is a credit union. If they (HarborOne members) thought theircredit union should be a bank, then they should not have been doingbusiness with the credit union in the first place.”

Garabedian, however, said the merger and acquisition trend thatappears to be gaining traction is that credit unions are buyingbanks.

He pointed to the $353 GFA Federal Credit Union acquisition of the $83 million MonadnockCommunity Bank in Peterborough, N.H, the $1.3 billion UnitedFederal CU in Michigan purchase of Griffiths Savings Bank inIndiana, and the proposed $2 billion Landmark CU of New Berlin,Wis., acquisition of the $290 million Hartford Savings Bank inHartford, Wis., which just won NCUA approval.

“It's a shame that we are losing another credit union,” said E.Andrew Keeney, a 35-year credit union attorney in Norfolk, Va.

Nevertheless, Keeney doesn't think the HarborOne conversion willweaken the credit union industry.

“I think that those that want to belong to a credit union aresolid credit union members. We have some great, great credit unionsand great management,” he said. “Occasionally, one will fall fromthe flock. It's regrettable, but it's not something that is totallyunexpected.”

Douglas Faucette, a spokesperson for America's Mutual Banks inWashington, an organization that represents mutual savings banks,said he believes the HarborOne conversion is a positivedevelopment.

“I think (HarborOne conversion) is positive because the creditunion has evolved to a point now that it can stand on its own twofeet and it doesn't need the help from anybody other than itsmembership and its customers,” said Faucette. “Now, I admit thatwhen a credit union suddenly turns around and wants to convert to astock bank, that is a very different conversation. But in thisparticular case, it just enhances (HarborOne's) mission. Why wouldanyone be opposed to this, I am not sure.”

Peter A. Conrad, president/CEO of the Co-operative Central Bankin Boston, Mass., said if HarborOne's conversion clears all of itsremaining regulatory hurdles, the financial institution will becomethe largest co-operative bank in the state. The average asset sizeof a Massachusetts's co-operative bank is about $500 million.

There are 51 co-operative banks in Massachusetts, which is theonly state in the union which offers a co-operative bank charter,Conrad said.

Conrad said the co-operative bank charter is similar to a creditunion charter in that depositors are also members with votingrights.

HarborOne CU's may take weeks or months to complete theregulatory hurdles.

After the certified member vote results and its accompanyingmaterials are submitted to the NCUA, the agency will have 30 daysto either approve or reject the certification. The state's divisionof banks will have 10 days to either approve or reject thecertification as well. HarborOne has already submitted itsapplication to obtain FDIC insurance.

“We are not projecting any completion time because the processis subject to regulatory review and possible delay,” said JamesRice, HarborOne's senior vice president of marketing.

“The FDIC won't give us any indication of acceptance untilafter the NCUA and the Massachusetts Division of Banks give theirapproval on the member vote (certification),” the HarborOnespokesman said.