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TAMPA, Fla. – Credit unions are getting into the business of trusts in a big way, and the timing couldn’t be better as the process of protecting their hard-earned wealth is becoming vital to millions of Americans. By far, the biggest industry trust company news ever occurred with the first nationally-chartered trust company – MEMBERS Trust Co. – launched in November by Suncoast Schools Federal Credit Union and CUNA Mutual. Members in all 50 states now have clearance to receive traditional trust services such as investment management, trust administration, estate planning, estate settlement, custody retirement plans and reverse mortgages through an `agency office’ or `representative office.’ The agency office option establishes a trust presence in a particular state and requires a trust officer to be physically located in a credit union. The representative office option is an extension of the credit union’s financial services program and does not require hiring a trust officer but utilizes the services of specially trained representatives to consult and make recommendations for trust services. Since its Nov. 3 launch, four credit unions have signed contracts to establish agency offices and negotiations are underway for four additional ones. Trust officers are in place at two of those offices and two more are being sought for the remaining. Twenty-eight “advisory services representatives,” representing 25 credit unions, have completed the two-step MEMBERS Trust Co. training program. Three of those credit unions have signed contracts to establish the representative offices and the remaining 22 are expected to sign similar contracts by the end of the first quarter of 2004. The quest to become members’ primary financial institution motivated many. Boeing Financial Services, the CUSO that serves Boeing Employees Credit Union, opened BECU Trust in April and has since amassed nearly 20 clients and more than $11 million in assets under administration. Partly because the credit union is the largest in Washington with more than 300,000 members worldwide and $3.7 billion in assets, trust administrators decided to keep its target to members and non-members with a minimum of $350,000 in investable assets. Launched in 1997, Alaska USA Trust Co. surpassed the $3 billion in assets mark this year managing assets for 450 individual investors and 300 institutional investors. The trust company is a wholly-owned subsidiary of Alaska USA Federal Credit Union, the largest in the state with 253,000 members and $2.2 billion in assets OmniAmerican Credit Union, one of four credit unions approved to be a registered investment adviser nationwide, hopes its OmniAmerican Trust Services launched in October will be the enticer to woo high-net worth members. The credit union is among the largest in Texas with 238,000 members and $1 billion in assets. UW Credit Union in Madison, Wis. partnered with First Business Trust & Investment Services, a division of First Business Bank to woo members to bring their trust needs here. As the second largest credit union in the state with 90,000 members and $650 million in assets, it will keep its affiliation with CUNA Mutual Group’s MEMBERS Financial Services. Members Trust Company of Colorado ended 2003 with $43 million in assets under administration and 170 members after opening for business nearly three years ago. Tiny Hoyt Lakes Community Credit Union, with 5,000 members and $34.8 million in assets, took on the ambitious effort of launching its CUSO, CU Financial Services of Minnesota, in 2000 with hopes of offering trust services through Securian Trust Co., N.A., an affiliate of Minnesota Life and Advantus Capital Management. That effort hit a few bumps in the road in part because of the credit union’s remote rural distance and “the support not being very proactive,” from Securian, said Don Werdick, HLCCU’s president/CEO. Hoyt Lakes is in the process of switching to PrimeVest, a broker dealer that works exclusively with financial institutions. “Trust services have been slow,” Werdick said. “We’ve put them on hold for now and are considering offering them through PrimeVest.” Sun Bancorp Inc., a billion-dollar holding company, announced it would acquire Lewisburg, Pa.-based Sentry Trust Co., one of the first CUSOs to offer trust services to credit unions. The deal is scheduled to be complete by Jan. 31, 2004 and saw the 20% divesture of Patriot Federal Credit Union, its largest shareholder. The breakaway occurred after Sentry’s acquisition of two local banks triggered NCUA’s “50 plus one” regulation, which requires CUSOs to serve a majority credit union member base. [email protected]

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