The mid-term congressional election is less than two months away and some observers wonder whether the event will be all about nothing.
Nov. 26--Federal regulators have given Thrivent Financial for Lutherans the final green light to turn its bank into a not-for-profit credit union, an uncommon change that creates one of the largest faith-based credit unions in the country.
The official conversion takes place this coming weekend, Thrivent announced Monday, with Thrivent Financial Bank's two branches in Minneapolis and Appleton, Wis. opening Dec. 3 as Thrivent Federal Credit Union. The website will change Saturday.
All Thrivent bank clients will become member-owners of the new credit union, which will have nearly $500 million in assets.
The bank, meanwhile, is changing its name and charter to become a limited purpose, non-depository trust called Thrivent Trust Company, which will have $600 million in assets under management and continue to be regulated by the Office of the Comptroller of the Currency (OCC).
"It's good to see the light at the end of the tunnel," said Todd Sipe, head of Thrivent's bank and the new president and CEO of the credit union.
In an interview Monday, Sipe said that Mike Haglin, a division vice president for Thrivent Financial for Lutherans, will serve as chairman of the credit union's board.
Thrivent received the final approval in a written order from the OCC and the Federal Deposit Insurance Corp. around Nov. 15. Its primary regulator now will be the National Credit Union Administration.
Thrivent, a Minneapolis-based fraternal benefit society, is part of an exodus from banking after the passage of the Dodd-Frank Act, which intensified bank regulation and requirements.
As part of Dodd-Frank, the Federal Reserve took over supervising savings-and-loan holding companies, work previously done by the Office of Thrift Supervision, which was folded into the OCC.
In reaction, a number of large life insurance companies such as Prudential Financial Inc. have taken steps this year to ditch their designation as savings and loan holding companies by disposing of their bank units, and focusing instead on trust services. Prudential Bank & Trust, for instance, sold its deposits to Wayzata-based TCF Financial Corp. earlier this year.
Minneapolis-based Ameriprise Financial Inc. is also in the process of turning Ameriprise Bank from a federal savings bank to a non-depository trust, a process it expects to complete by the end of the year.
But turning bank units into credit unions is not the popular option.
There's no profit motive for bankers, noted Pat Keefe, spokesman for the Credit Union National Association. Keefe said his organization thinks the last time a U.S. bank converted to a credit union charter was 1996, when a bank serving Eastman Kodak employees converted to ESL Federal Credit Union in Rochester, N.Y.
David Royal, deputy general counsel for Thrivent Financial for Lutherans, said the bank could have taken other approaches, such as liquidating the bank, but that didn't seem prudent. Plus, the credit union model fits well with Thrivent because of its common bond with the Lutheran community, he said.
"We thought it was important to continue offering depository services to Thrivent members," Royal said, calling the credit union as "sort of an elegant way of solving a problem."
Jennifer Bjorhus -- 612-673-4683
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