The credit union sent ballots to its roughly 20,000 members asking them to approve the charter change without applying to any relevant regulators to start the charter change process. Ballots must be returned to the credit union today.

This in contrast to the conversion process for federally insured credit unions, which mandate a converting credit union seek the approval of members about a possible charter change at an early stage of the process, but generally sees the credit union apply with regulators before asking members to vote.

A California Department of Business Oversight source said, on background, the department knew Monterey wanted to convert to a bank but did not know which charter it would seek.

The Herald repeated the credit union's claim that it needed to convert it charter in order to offer more business loans. However, as a privately insured, California state chartered credit union, Monterey does not have a cap on its business lending.

Monterey CU executives also said in the story they were seeking a conversion because of the marketing hurdles credit unions face in explaining their cooperative status to members, and also said a bank charter would make it easier to raise additional capital.

The Herald also reported that, as a bank, the institution would pay its board members.