The $1.8 billion HarborOne Credit Union said Monday it received the green light from NCUA and the Massachusetts Division of Banks, clearing two of the three regulatory agency hurdles that would allow the 96-year-old Brockton, Mass., credit union to convert into a mutual co-operative bank charter.

What's more, the credit union said it received notification from the FDIC that its application was officially accepted for processing. HarborOne must wait for approval for FDIC insurance before completing its conversion in what would be perhaps the largest credit union-to-bank conversion to date.

“HarborOne Credit Union today announced that the NCUA Office of Consumer Protection has notified HarborOne that it complied with the procedural requirements of the NCUA's conversion regulations,” reads a statement released by HarborOne CU.

“HarborOne also received notification from the Massachusetts Division of Banks that it finds no reason to disapprove of the methods by which the membership vote was taken and that the vote is approved,” the statement said.

Nearly 62% of HarborOne members voted in favor of the charter change proposal last month. The credit union said 22,433 of its 139,078 members cast ballots.

HarborOne has grown to become the largest state-chartered credit union in New England. The longstanding credit union has said its reasons to convert were the flexibility to expand HarborOne's markets and customer base, increase its lending authority, including small business lending, and gain access to additional capital.

Soon after the conversion plan was announced Feb. 16, 2012, and approved by HarborOne's board a month later, it sparked industry debate and criticism from some credit union leaders.

Longtime credit union attorney Steven R. Bisker of Alexandria, Va., told Credit Union Times last month that members who voted for the conversion were not voting for their own best interest. He argued that NCUA data has consistently shown that when a credit union converts to a bank, the rates charged for loans and the rates paid for savings are not as good as when they were operating as a credit union.

Another credit union attorney, Richard Garabedian in Washington, D.C., who specializes in conversions, said he doesn't think the HarborOne move will trigger a wave of similar efforts.

Instant Insights /

HarborOne Gets NCUA, State Approval for Bank Conversion

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