Should its sponsor broaden its common bond requirements, Thrivent Federal Credit Union will have to submit its sponsor's new bylaws to the NCUA for review to make sure its field of membership remains in accord with the agency's regulations, according to an NCUA letter.
Thrivent Financial for Lutherans, the $75 billion insurance and financial services mutual company sponsors the $478 million, 45,000-member TFCU, which it formed last year from the consumer lending and deposit taking business of a bank that it owns.
The sponsoring firm's members face a vote starting in March about whether to expand the firm's common bond for membership from Lutheran to Christian, raising the possibility that it might also sharply expand the credit union's field of membership.
That possibility drew a protest letter this week from the American Bankers Association, raising questions about whether TFL's moving its common bond from Lutheran to Christian might mean the Appleton, Wis.-based credit union adopts an illegally broad FOM.
“ABA believes that the National Credit Union Administration (NCUA) has an affirmative obligation to limit this type of expansion,” wrote ABA Senior Economist Keith Leggett in the Feb. 4 letter to the agency. “The NCUA needs to ensure a genuine affiliation between credit union members, as Congress mandated.”
The agency responded with a letter, also on Feb. 4, which said that if TFL changed its common bond from Lutheran to Christian, TFCU would have to submit the organization's bylaws to the agency for review of their impact on its FOM.
Citing the agency's Interpretive Ruling and Policy Statement 08-2, Gail Laster, director of the NCUA's Office of Consumer Protection, wrote: “In the event a change occurs, Thrivent Federal Credit Union would need to submit the sponsor's revised bylaws to this office for review to ensure the sponsor continues to meet NCUA's associational common bond requirements.”
Laster did not indicate how long such a review process might take or what steps the agency might take if it found TFL's new common bond, should it occur, was too broad for TFCU's field of membership.
The agency did not say whether any credit unions in the past have faced similar situations or how they were resolved.
Meanwhile, TFL has been somewhat surprised at the attention this potential change to its common bond has drawn, and Brett Weinberg, communications director for the firm, challenged the notion that making that change would mean TFCU would be throwing open its doors to Christians generally.
“[T]o be a credit union member, an individual must still become a Thrivent member or otherwise meet the credit union’s eligibility requirements, such as being a credit union employee or Thrivent employee,” he wrote in an email response to a question from Credit Union Times.
“It is not correct to say that any Christian could join Thrivent Federal Credit Union if Thrivent’s membership did vote to extend its common bond,” Weinberg said. “The credit union’s membership would still be primarily restricted to those who meet Thrivent’s eligibility criteria and who actually join the fraternal benefit society.”
In addition, he noted that the making the common bond had been in discussion at the firm for some time and actually predated the creation of the credit union.
“In addition, the purpose of the potential extension is to allow us to help more Christians be wise with money and live generously” Weinberg added. “The potential impact on the credit union field of membership simply did not play a factor in the decision to move forward with the member vote.”