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

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

The California Department of Business Oversight has still notreported the arrival of an application from Monterey Credit Unionto convert its charter. Once the application arrives, the regulatorwill have to develop regulations to oversee the process Montereymust follow, according to its recently retired general counsel.

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

First, at least 10% of the credit union's members were requiredvoted in favor of the charter change. Second, supporters of theconversion would have to win a majority of the overallballoting. However, the rules also left a mechanism in placethat would let MCU overcome the 10% requirement.

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

This is significantly different from how other states havestructured their charter conversion laws. Some have included ballotfloors that have sometimes blocked conversion. In 2004, forexample, the then $1.1 billion LakeMichigan Credit Union failed to convert its charter after itfell 2,500 votes short of meeting the minimum required bystatute.

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

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