ABA Scorns Thrivent’s Common Bond Change
A proposed change to a federal credit union’s sponsoring organization's membership has raised questions about whether the federal credit union’s field of membership will still meet NCUA regulations.
If Thrivent Federal Credit Union's sponsor broadens its common bond, the 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 compliance with the agency’s regulations, according to a letter from the agency.
Thrivent Financial for Lutherans, the $75 billion insurance and financial services mutual company sponsors the $478 million 45,000-member Thrivent FCU, which it formed last year from the consumer lending and deposit business of a bank that it also owns. The sponsoring firm’s members face a vote starting in March about whether to expand the common bond for membership from Lutheran to Christian, raising the possibility that it might also sharply expand the credit union’s field of membership.
The scenario drew a Feb. 4 protest letter from the American Bankers Association, raising questions about whether expanding the common bond might mean the credit union adopts an illegally broad FOM.
“ABA believes that the National Credit Union Administration has an affirmative obligation to limit this type of expansion,” wrote ABA Senior Economist Keith Leggett in the 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, writing that if Thrivent Financial changed its common bond from Lutheran to Christian, Thrivent FCU would have to submit the organization’s bylaws to the agency for review.
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 Thrivent Financial’s new common bond was too broad for Thrivent FCU’s field of membership.
The agency has not yet said whether any credit unions in the past have faced similar situations or how they were resolved.
Meanwhile, Thrivent Financial was surprised at the attention it is getting due to the potential change to its common bond, and Brett Weinberg, communications director for the firm, challenged the notion that making that change would mean the credit union would be throwing open its doors to Christians generally.
“To 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. “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. 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 expanding the common bond had been under discussion for some time and predated the creation of the credit union. “The purpose of the potential extension is to allow us to help more Christians be wise with money and live generously,” he 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.”