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First CU-to-bank conversion in years pondered in Md.
COLUMBIA, Md. (2/17/11)--For the first time in several years, a credit union has announced it is considering converting to a federal mutual savings bank charter. Har-co Maryland FCU, a $199 million asset credit union based in Bel Air, Md., on Monday published a notice to members of its consideration to convert from a federal credit union charter to that of a federal mutual savings bank. Founded in 1955, Har-co Maryland FCU serves more than 27,849 members of primarily educational groups. It's notice said it intends "to increase membership and economies of scale" to better serve members and "to preserve its tradition of competitive pricing, plus make it easier to cost-justify adding branches." It also noted a conversion would provide "additional business flexibility." Jennifer M. Simmons, interim CEO/chief membership officer at the Maryland & District of Columbia Credit Union Association, said that while the association's board "firmly believes that the credit union charter provides the best vehicle for serving the financial needs of consumers, we do support the right of member/owners to exercise democratic control of their credit union. "The association encourages credit unions considering conversion to make their decisions based solely on the best interest of the members and that the credit union provides full, plain language and timely disclosures to the membership so that an informed decision can be made by the member/owners," Simmons added. Credit union conversions to banks have been on the decline, with only 31 conversions since 1995. No credit unions converted in 2010 and only one converted in each of 2009 and 2008, according to a News Now analysis (Jan. 14).
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