KENNEBEC, Maine-KV FCU's board has formally voted in favor of converting to a bank in order to merge with Kennebec Savings Bank, bringing the conversion and merger one step closer to fruition.
But the decision ultimately rests with a vote of the membership, which is why the Maine CU League still has hope KV will remain a credit union.
"From everything we have heard, many members are opposed to this proposal and look forward to making their votes count. From the beginning, our position has been and remains that the credit union charter is the best option," said John Murphy, president of the league. "There is a significant value of member-ownership that belonging to a credit union offers and that would be lost if this credit union converts. Educating members and helping them understand what they would lose will be the focus of our message in the months ahead."
The conversion to bank through merger is emerging as a new business strategy, with Northeast Community CU in Haverhill, Mass., in the process of merging into Haverhill Savings Bank, in a stagnant market marred by low growth and slim profitability. The merger into bank was also tried before when Beacon Federal Savings Bank, one of the first credit unions to convert to a bank, merged separately with four small credit unions. But in those deals, the acquiring bank had formerly been a credit union.
