Mutual Bank Transition?

[nwass at together.net]

CD Bankers,

This question may be out of the ordinary but I would appreciate your
wisdom and experience. I am a volunteer with a local mutual savings
bank (i.e. the bank is owned by its depositors) that has an excellent
record as a community-minded bank. Like many mutual savings banks, the
bank is seriously considering switching to a mutual holding company. I
am interested in how best to approach this from a community reinvestment
perspective. Are there examples where this has been done well? Are
there community advantages when this reorganization occurs? Are there
ways to protect the original mission of a mutual savings bank? Thanks
for any thoughts you may have.

Sincerely,
Nancy Wasserman
Sleeping Lion Associates, Inc.
17 Kent St.
Montpelier, VT 05602
802 229-8096
nwass@together.net



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[carras at bellsouth.net]

Many mutual banks in New England have converted to stock ownership and
eventually have been acquired by larger institutions i.e. Bank of Boston
nee Fleet. The underlying issue is whether the mutual bank becomes more
responsive to community investment needs by becoming a stock institution.
Subjectively speaking, I haven't seen any mutual institution that suddenly
changed its community investment record in any considerable measure. In
fact, one may argue that some mutuals did not do much from a CRA perspective
and that their eventual acquisition by larger institutions may actually have
accerelated their CRA efforts.
You may want to check with the Commissioner of Banks office in Massachusetts
where a state CRA statute is on the books. Once a mutual converts to stock
ownership and is acquired by a nationally chartered institution, the state
loses its regulatory oversight of the mutual.
James Carras
Carras Community Investment, Inc.
954.525.1023

----- Original Message -----
From: "Nancy Wasserman" <nwass@together.net>
To: "CD BANKING LIST" <communitydevelopmentbanking-L@cornell.edu>
Sent: Tuesday, April 04, 2000 8:17 AM
Subject: Mutual Bank Transition?


> CD Bankers,
>
> This question may be out of the ordinary but I would appreciate your
> wisdom and experience. I am a volunteer with a local mutual savings
> bank (i.e. the bank is owned by its depositors) that has an excellent
> record as a community-minded bank. Like many mutual savings banks, the
> bank is seriously considering switching to a mutual holding company. I
> am interested in how best to approach this from a community reinvestment
> perspective. Are there examples where this has been done well? Are
> there community advantages when this reorganization occurs? Are there
> ways to protect the original mission of a mutual savings bank? Thanks
> for any thoughts you may have.
>
> Sincerely,
> Nancy Wasserman
> Sleeping Lion Associates, Inc.
> 17 Kent St.
> Montpelier, VT 05602
> 802 229-8096
> nwass@together.net
>
>



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