HarborOne CU Considers Bank Conversion

CU Times - By Donald Shoultz - February 16, 2012

HarborOne Credit Union said it is considering a charter conversion to a mutual savings bank.

The $1.8 billion credit union, based in Brockton, Mass., placed the announcement from the board of directors to members on its website.

“A mutual co-operative bank is owned by and operated for the benefit of its depositors in a manner similar to the way a credit union is owned by and operated for the benefit of its members,” the notice said.

“If, after reviewing comments received by members, the board of directors votes to proceed with the conversion, you will receive a notice and information statement that provides greater detail on the reasons and consequences of the conversion,” it added.

The credit union said among the reasons to convert were the flexibility to expand HarborOne’s customer base, increase its lending authority and gain access to additional capital.

The board said, “We believe that with increased lending capacity, HarborOne would be able to generate greater revenues, which would help sustain our attractive deposit and loan rates and fees and add additional branches. Of special import given the current economic climate, enhanced commercial loan authority would allow us to further expand our small business lending program.”

The announcement went on to say, “The board of directors believes having the flexibility to access capital options is a strategic necessity. At this time the board does not have any intention to convert to a stock form.

“However, the board of directors believes that establishing the flexibility to access capital options through a conversion to stock form is prudent, and in any event, Massachusetts law would prohibit a stock conversion for a one-year period after the conversion. Additional capital may be required in the future for any number of reasons, including to support increased lending to members, to build new branches, or to enhance products or services.”

The board invited written comments from members. Comments are due before March 16. The board will consider the comments and consider the conversion plan on March 21.