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NEW CASTLE, Del. – Nearly six months into the launch of DELCU Financial Services, L.L.C.’s trust services operation, competition from rival banks are not as high a priority as making a name for itself throughout the Mid-Atlantic states. Earlier this year, CU Members Trust Services, formed as a subsidiary of DELCU, a credit union service organization owned by 16 Delaware credit unions and aligned with INA Trust, FSB, to offer traditional estate planning services. INA Trust is a federal savings bank chartered to serve members nationwide. Since its soft launch earlier this year and its official start on March 1, the cooperative has gone full speed ahead to let members know that estate planning services can be had through non-traditional venues. One attractive selling point is INA Trust’s lowering of the industry standard $1 million dollar minimum asset requirement found in many trust banks to qualify for a trust to $250,000, said Bob Walls, president of the Delaware Credit Union League, which manages DELCU. Walls acts as the trust liaison between interested credit union members and INA Trust. “Things are going well,” Walls said. “We’ve had extensive training with the credit unions on what can and can not be said if members want more information.” CU Members Trust literally pays nothing for marketing and training costs through an agreement with INA Trust which absorbs those expenses. MEMBERS Capital Advisors, Inc., CUNA Mutual Group’s registered investment advisor affiliate, will provide costs associated with asset management services. Walls said 105,000 statement stuffers have been printed and 60,000 of those will be sent out with the league’s second quarter newsletter. In February, INA Trust trained employees at 16 credit unions to respond to general questions and make referrals. The trust services became available on March 1 and DELCU will continue its marketing campaign through links from its sponsoring credit unions’ Web sites to INA’s page, target mailing using CUNA Mutual’s Member Connect, newsletter articles and lobby brochures. Each of the CUSO’s 16 credit unions will designate a `trust day’ where a trained trust representative will be there to answer questions. The league’s board recently approved a newsletter that will be distributed to non-CUSO credit unions throughout the state and a DELCU Web page is also in the works. While it’s too early to offer any hard numbers, Walls said he has received a respectable number of calls from members wanting information. “As with any new service, we didn’t expect a blitz of calls,” Walls said. “We anticipate more interest with the statement stuffer mailings.” Meanwhile, CU Members Trust is looking to establish alliances throughout the Mid-Atlantic including in Maryland and Pennsylvania. So far, New Jersey has expressed some interest in a possible connection with the new trust services operation, Walls said. Delaware is home to a number of trust companies in large part because of its friendly corporate laws but Walls said they’re not competing with many of them because of the lower minimum threshold INA Trust has set forth for credit union members. “Members typically don’t have all their assets with their credit union and if we’re not meeting their needs, someone else will,” Walls said. “It’s all about keeping the member involved at their credit union.” Administrative fees, which Walls said is lower than most trust companies, start at $1,650. DELCU will receive 25% or $412.50 of that amount to be used towards capital accumulation for new services and dividend distribution to CUSO members. Walls said it’s still too early to speak on revenue earned. Going forward, CU Members Trust plans to offer estate-planning management with individual trust accounts. Walls said there are no plans to offer pensions or corporate trusts partly because of the plethora of rules and regulations involved but mostly to focus on the unique need of credit union members. While CU Members Trust is seeking alliances in a handful of states, recent efforts by CUNA Mutual Group, Suncoast Federal Credit Union and others to start a nationally-chartered trust company aren’t a threat to Delaware’s goals. “CUNA Mutual is not a fly-by-night company,” Walls said. “If anything, we can compliment each other rather than competing with each other.” He added any new business – especially within the trust services industry – takes time to develop and he’s curious to see whether the new entity will deliver services through the Internet or over the telephone. “CUNA Mutual is a very solid company and that’s why we’re using them. They obviously feel they have a strong enough business plan to make this happen.” – [email protected]

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