Industry participants aren't sure whether HarborOne CreditUnion's possible conversion signals a growing trend or is just anaberration.

The $1.8 billion Brockton, Mass., credit union's announcement,and withdrawal from CUNA and the state league, joins similar movesby the $1.5 billion Technology CU in California and the $187 million HAR-COMaryland FCU.

Tech CU is still considering conversion while HAR-CO Marylandplans to complete the process this month.

Former NCUA Chairman Dennis Dollar said there have been abouttwo credit union-to-mutual savings bank conversions a year since1995, about 35 altogether.

“That is hardly an avalanche,” said Dollar, now a Birmingham,Ala., consultant. “Unless the tax exemption is lost, I don'tbelieve the recent conversion announcements, while newsworthy, arethe beginning of a major sustained trend that will signal the endof the credit union industry as we know it.”

Meanwhile, Peter Duffy, managing director of New York investmentbankers Sandler O'Neill, said his firm has had discussions withmore than 50 CUs which have conducted some portion or all of duediligence.

Duffy stressed that his comments should in no way be construedto say that many are ready to convert, just that more believe it isimportant to be prepared.

Duffy, Dollar and a sampling of New England CEOs do findagreement in the argument that the credit union charter overallneeds fixing and that policymakers at the NCUA and Congress shouldbe looking hard at why the CU charter is now less competitive withthe MSB charter.

Massachusetts CEOs queried by Credit Union Times overthe past week said that while they were closely following theHarborOne story they remained steadfast supporters of their chartereven amidst the challenges of NCUA assessments, capital frustrations and uneven examprocedures.

“We can understand how HarborOne finds capital limitations butfor us we're proud credit unions who believe that the credit unioncharter provides service and value to members,” said Kenneth Dyer,president/CEO of the $644 million Liberty Bay CU in Braintree.

In its online disclosure notice of a possible conversion,HarborOne blamed constraints in building capital as well as majorFOM impediments as reasons for switching, points refuted by atleast one leading Washington lawyer, Steve Bisker, a former seniorNCUA attorney, who said his examination of the HarborOne filings found thecredit union to be well within its member business lending cap.

Still, there were other industry-watchers who find CUs in NewEngland and elsewhere more worried than ever about where to buildsustainable growth in the current climate.

“It's pretty clear from our discussions with the larger creditunions that more of them are recognizing that the easy growth isover for most and in order to be prepared for the battle for marketshare, they need access to capital and rules more like those thecommunity banks have,” said Duffy, the New York investmentbanker.

And Thomas Glatt Jr., a Wilmington, N.C., consultant said everyCU board ought to consider the conversion option “or at least thinkabout it.”

Credit union managers “used to get offended if you even broughtup the idea. Now they don't,” Glatt said. He said that couldsuggest a possible increase in conversions coming in the next fiveto 10 years.