The roughly 3,287 members who voted to convert Monterey Credit Union to a mutual bank approved moving to a California chartered mutual bank, according to the balloting package.

The credit union reported Monday that of the 21% of its members who participated in the charter change balloting, 80% voted in favor of the conversion.

The California Department of Business Oversight has still not reported the arrival of an application from Monterey Credit Union to convert its charter. Once the application arrives, the regulator will have to develop regulations to oversee the process Monterey must follow, according to its recently retired general counsel.

MCU also said CDBO had reviewed the document package before it the credit union sent it to members and said the credit union must meet a two-tier test to prove member approval.

First, at least 10% of the credit union's members were required voted in favor of the charter change. Second, supporters of the conversion would have to win a majority of the overall balloting.  However, the rules also left a mechanism in place that would let MCU overcome the 10% requirement.

According to the documents, if fewer than 10% of the credit union's members voted in the balloting, but a majority of those voting approved of the charter change, the credit union could ask the CDBO Commissioner to approve it anyway.

This is significantly different from how other states have structured their charter conversion laws. Some have included ballot floors that have sometimes blocked conversion. In 2004, for example, the then $1.1 billion Lake Michigan Credit Union failed to convert its charter after it fell 2,500 votes short of meeting the minimum required by statute. 

CDBO said the particular voting rules had been laid down in California statute.

MCU also indicated in its disclosures that it will have to pay state and local taxes as a bank, but did not discuss what the impact of that taxation might be on the institution's income, fee structure or interest rates.