Thrivent to Turn Bank Into Nonprofit Credit Union

The insurance giant is reportedly awaiting regulatory clearance, but if all goes as planned, its Thrivent Financial Bank subsidiary will become Thrivent Financial Credit Union this summer.

Thrivent Financial for Lutherans is turning its for-profit bank subsidiary into a nonprofit credit union, the Star Tribune reported Friday.

The Minneapolis-based insurance company, which caters to Lutherans across the country, is reportedly still waiting to receive clearance from the National Credit Union Administration and other regulators. It seeks to change the name of its Thrivent Financial Bank subsidiary to Thrivent Federal Credit Union.

If approval is granted, the credit union will open this summer, according to the Star Tribune. The Minneapolis newspaper reported that Todd Sipe, who currently leads Thrivent’s bank, will become president, CEO, and chairman of the credit union.

Sipe told the Star Tribune that transitioning to a credit union was necessary because of new regulatory changes under the federal Dodd-Frank Act. It used to be that banks owned by insurance companies were regulated by the Office of Thrift Supervision; now, they are regulated by the Office of the Comptroller of the Currency and the Federal Reserve. The shift reportedly created more stringent bank accounting methods and capital requirements and gave “us one more regulator at our doorstep,” Sipe told the newspaper. The move means that Thrivent’s credit union won’t be subject to the Federal Reserve’s more rigorous requirements.

Additionally, Thrivent spokesman Brett Weinberg told the Star Tribune that Thrivent’s insurance business is based on a member-ownership model similar to the field-of-membership model used by credit unions-so the shift is logical.

According to the newspaper, Thrivent opened its bank in Minneapolis about a decade ago-and it now serves more than 40,000 clients nationwide through online services, two physical branches in Minneapolis, and two more brick-and-mortar locations in Appleton, Wisconsin.

The Pioneer Press reported that Thrivent’s bank has $1.1 billion in assets under management. Following the transition, trust services with $580 million in assets will reportedly remain with Thrivent Financial, and traditional banking functions will split off to form a credit union with $530 million in assets under management and potential clients that include Thrivent Financial for Lutherans’ 2.5 million members.

The credit union will offer traditional bank services like checking and money market accounts, CDs, mortgages, home equity, and consumer loans, according to the Pioneer Press. Sipe told the newspaper that credit unions can provide those offerings with lower fees and better interest rates than banks.

Thrivent Financial for Lutherans is Minnesota’s second-largest privately held company based on revenue, which totaled $7.53 billion during the organization’s most recent fiscal year.

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