The bank’s change in status will create one of biggest faith-based credit union in America.
Thrivent announced that the conversion would occur this weekend and that its two branches in Wisconsin would open Dec. 3, according to StarTribune.
All of Thrivent’s customers will become member-owners of the newly established credit union after their accounts are transferred. The newly established credit union will hold almost $500 million in assets after the change is complete.
The bank will change its name and charter to become a limited, non-depository trust under Thrivent Trust Co., which will have $600 million in assets and will be regulated by the Office of the Comptroller of the Currency, StarTribune reports.
The OCC and Federal Deposit Insurance Corp. gave the bank the green light in a written order earlier this month. The credit union’s regulator will now be the National Credit Union Administration.
Thrivent’s decision to become a credit union is just one of many other similar decisions made by U.S. financial institutions after the passage of the 2010 Dodd-Frank Act, which heightened the regulatory environment, according to StarTribune.
In order to avoid a designation as a savings and loan holding firm, some large insurance firms like Prudential Financial have gotten rid of their bank units and focused on trust services. Other institutions have closed or altered their deposit operations.
Ameriprise Financial is also in the process of changing over from a federal savings bank to a non-depository trust, a change it expects to make before year’s end.
Pat Keefe, a spokesman for the Credit Union National Association, said that there is no profit motive influencing the decision to change from a bank to a credit union, adding that the last time a U.S. bank changed its charter to become a credit union was in 1996, StarTribune reports.
David Royal, the deputy general counsel for Thrivent, said that the bank could have opted for a different route, such as liquidation, but such a move did not seem practical. The credit union model fit Thrivent well because of its bond to the Lutheran community.
“We thought it was important to continue offering depository services to Thrivent members,” Royal said, adding that the credit union is “sort of an elegant way of solving a problem,” according to StarTribune.