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May 9, 2012 – HarborOne CU of Brockton, Mass., is looking to have members vote on a proposed conversion to a mutual cooperative bank charter by October, but NCUA Chairman Debbie Matz told the Boston Globe conversion isn't likely to benefit members.

"There is no reason to think that members will be better served by a bank than a credit union," Matz is quoted saying in the May 7 article.

The federally insured, state-chartered HarborOne CU is a $1.9- billion-in-assets institution that serves 140,000 members. Its chief executive, James Blake, says a conversion will allow the institution to serve a broader group, make more commercial loans and raise more capital, the paper reported. He pointed to the federal statutory limit on member business lending as one obstacle to growing its lending, the article says.

Matz said the credit union isn't nearing its MBL cap, the report said, and that it also has the option to expand its geographical boundaries.

In late March, Blake told the Patriot Ledger that members will begin receiving mailings on the conversion this summer. He said ballots, to be provided in the third mailing, will be due back by October, the paper reported.

The credit union's disclosures to members are currently being reviewed by NCUA. Meanwhile, Matz told the Globe she thinks members will approve the plan; there has been no organized opposition to this proposed conversion. "I'm assuming it will go through," Matz is quoted saying. "I just think it's not going to be in the best interests of their members."

NCUA says 20 of 28 credit unions that have converted to a mutual bank since 1995 later converted to stock form. The article adds that industry executives describe such conversions as being "often controversial . . . because they sometimes create a windfall for bank executives and leave the bank vulnerable to a takeover."

The article also quotes banking industry representatives.