HarborOne Credit Union members approve plans to become cooperative bank
The second largest credit union in Massachusetts will likely become a state-chartered co-operative bank later this year.
Members of the HarborOne Credit Union in Brockton have approved the institution’s plans to become a bank, the credit union announced Monday.
HarborOne senior vice president James Rice said the conversion process, which must still be reviewed by regulators, will likely take several months to complete.
About 62 percent of the 22,000 members who took part in the vote approved the plan to become a bank. The bank has about 140,000 members, most of whom were eligible to vote.
HarborOne executives argue the conversion will allow HarborOne to open up branches and serve customers in Boston and other areas outside its traditional membership territory in four counties in southeastern Massachusetts. It will also be free of credit union limits on commercial lending.
But some members and other critics opposed the move, saying credit unions typically offer better interest rates on savings and cheaper rates for loans than banks because credit unions typically don’t have to pay directors and are exempt from some taxes.
After the conversion, HarborOne would become a co-operative bank mutually owned for the benefit of its members and the community, rather than a stock-owned bank.
That means executives won’t own shares in the bank and the bank won’t be able to raise capital by selling stock -- unless it later undergoes a second conversion to a stock-owned bank, which would require approval of its depositors. In addition, directors will be elected by customers, rather than shareholders.
HarborOne, which has $1.8 billion in assets, is second in size only to Digital Federal Credit Union among credit unions based in Massachusetts. A spokesman for the National Credit Union Administration said he could not comment on the vote.Todd Wallack can be reached at email@example.com. Follow him on Twitter @twallack.