Thrivent Financial for Lutherans, the fraternal benefits society that has become the only non-profit listed on the Fortune 500, plans to create a new credit union to handle the traditional banking part of its broad financial services business.
The plans are detailed in an article on a password-protected part of the Appleton, Wis., organization’s corporate portal.
Thrivent Financial, formed in 2002 by the merger of the Aid Association for Lutherans and the Lutheran Brotherhood, has nearly 3 million members and says it's the largest fraternal benefits society in the country, with 1,400 chapters nationwide.
Thrivent Financial Bank has assets of about $550 million and provides checking and savings accounts, CDs, mortgage lending, consumer loans and online banking.
Those services will be offered by the new credit union, while a changed bank charter will keep Thrivent Financial Bank as a wholly owned subsidiary of Thrivent Financial “and we will use it to offer our members the trust and investment services the bank currently offers,” the website article says.
Current bank depositors will be grandfathered into the credit union and NCUSIF coverage will replace FDIC insurance, the website article says.
The boards of Thrivent Financial and Thrivent Financial Bank are expected to approve the plan by the end of the year and the bank should begin operating as a credit union by the middle of next year, the organization said in the article on its website.
A Thrivent spokesman on Friday said the organization expects to seek a federal charter for its new credit union but that final approvals are still pending from its board, as well as the NCUA, OCC, Federal Reserve, FDIC and Wisconsin Insurance Commissioner. He declined further comment pending those actions.
The conversion “is designed to bring the benefits of a not-for-profit credit union, including member ownership and governance, and more competitive products and services, to Thrivent members,” the article said.
Costly new regulatory demands on insurance companies that own and operate banks also were cited.
“In today’s environment, a member-owned and member-governed credit union is a natural fit for Thrivent,” Jim Thomsen, Thrivent’s senior vice president of member services, says in the article.
In a reply to a comment below the posted article, Todd Sipe, president/CEO of Thrivent Financial Bank, said three credit unions, one trust bank and one community bank were consolidated in 2001 to create the current bank.
“At the time, a thrift bank charter gave us the most flexible model to serve members,” Sipe said in the comment. “Today, driven mostly by the Dodd-Frank legislation, there are new costs, restrictions and the introduction to the Federal Reserve as a regulator, which has caused us to rethink our model.
“After considering all options, the decision to move to a credit union makes the most sense.”