New Haven residents, local community leaders and politicians continue to criticize the New Haven Savings Bank’s plans to convert from a mutual bank to a capital-stock bank. Although Connecticut banks are not required to hold a depositor vote by state law, many argue that the bank’s board of directors are neglecting the concerns of the community and fear an eventual out-of-state takeover of the bank after the conversion process.

A public hearing concerning the bank’s demutualization was held by State Banking Commissioner John Burke the night of Jan. 4 at Conte/West Hills Magnet School in New Haven. A similar hearing took place Dec. 4 in Hamden. More than 300 people showed up at each of the meetings to voice their concerns.

A press conference held by local state legislators outside the bank’s downtown New Haven office followed the public hearing Dec. 5. State Senate Majority Leader Martin Looney, a Democrat who represents New Haven, announced plans to introduce a bill to the state legislature in February that would minimize the profits gained by the bank’s board of directors and would require a depositor vote on plans for conversion. The bill would also require a five-year rather than three-year period after a conversion before the bank could be sold.

New Haven Savings Bank spokesman Paul McCraven had no comment on the proposed legislation as of yet, but said he thought the Monday night meeting was “productive.”

“We were open and wanted to come there to listen. All in all, we thought it was a positive hearing,” McCraven said.

Connecticut Center for a New Economy President Andrea Cole, whose organization opposes the bank’s demutualization, said it is unclear at this point exactly how the legislation could affect NHSB, but that it would certainly impact the 22 remaining mutual savings banks in Connecticut.

“[New Haven Savings Bank] lost its direction several years ago and used money from working people to provide loans in wealthy white areas of the state. It should be given another chance to do what it was originally supposed to do,” Cole said.

Cole said she was not surprised by the large crowd that showed up to criticize the New Haven Savings Bank on Monday night.

“One of the main things that has been underestimated is the depth of anger that the average working person has about the huge executive compensation packages that are currently being dished out in the face of such a difficult economy,” Cole said.

NHSB President Peyton Patterson announced plans for the bank’s conversion and acquisition of the Savings Bank of Manchester and Tolland Bank in July 2003, citing that demutualization is the only way to remain competitive with other banks. The State Department of Banking and the Federal Deposit Insurance Corporation (FDIC) are in the process of reviewing the bank’s conversion plan and will reach a decision within the next two months.