The Federal Deposit Insurance Corp. has agreed to let Falmouth Co- operative Bank in Massachusetts convert to stock form without meeting the agency's depositor vote requirement.
The FDIC board voted to accept the results of a Dec. 13 depositor meeting held in Falmouth, which only 399 of the thrift's 4,900 depositors attended, to vote on the transaction.
About 84% of the depositors present voted for the conversion, and the FDIC board decided that result indicated enough depositor support to warrant a waiver.
Richard A. Schaberg, Falmouth's attorney, said an FDIC official told him the waiver was granted on the basis of Falmouth's specific circumstances and does not appear to set a precedent for future applications by other Massachusetts co-operative banks.
Falmouth officials now hope to complete the conversion by mid-March.
The bank's application had been held up for months over a conflict between the FDIC's new conversion regulations and state law.
The federal agency requires a majority of all depositors to vote for a conversion, by proxy or in person, but Massachusetts law bars proxy voting and requires a two-thirds majority vote of those attending a depositors meeting. State regulators had promised to reject the application if Falmouth violated state law by allowing proxy voting.
The thrift's officials sought an FDIC waiver, which is permitted under the agency's rules, because about one-fourth of the co-operative's depositors live off Cape Cod, including out-of-state, hindering efforts to meet both state and federal requirements.