ABA Sounds Alarm Over Lutheran Credit Union's Membership Plans

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WASHINGTON — The scope of membership for a credit union that serves Lutherans has caught the attention of the American Bankers Association.

In a letter Monday to the National Credit Union Administration, the ABA — which generally seeks limits on the activities of credit unions under their tax exempt status — expressed concerns about whether the parent group sponsoring the Appleton, Wis.-based Thrivent Federal Credit Union was planning to expand the definition of its "common bond" to be able to serve more members.

Keith Leggett, a vice president and senior economist for the ABA, suggested that Thrivent Financial for Lutherans — the not-for-profit fraternal benefits society that sponsors the credit union — may vote on whether to designate its common bond as Christians rather than only Lutherans. That potentially could also expand the scope of those served by the credit union, which now includes members of the benefits society.

Leggett warned that such a move could lead to a definition broader than that allowed under statutory limits on credit union membership. (Thrivent's credit union successfully converted from a mutual savings back last year.)

"ABA is concerned that extending Thrivent Financial for Lutherans' common bond to all Christians would be a considerable and problematic expansion of the credit union's membership," Leggett wrote in the letter addressed to NCUA Chairman Debbie Matz. "While Christians may share reasonably similar beliefs, the different and sometimes conflicting doctrinal variations among different denominations suggest that all Christians do not share a meaningful affinity or interaction."

He said such a broad common bond would be similar to a credit union's membership being defined by a person's age. "As you may remember, age by itself (including status as a senior citizen) does not create an affiliation or common interest that is sufficient to support a field of membership at a credit union," Leggett wrote.

He said the credit union regulator "has an affirmative obligation to limit this type of expansion.

"The NCUA needs to ensure a genuine affiliation between credit union members, as Congress mandated," Leggett said.

While a Thrivent Financial for Lutherans spokesman acknowledged such expanded eligibility for the benefits society could affect the credit union, that is not the intent behind the company's considering the vote.

"The purpose of the potential extension is to allow us to help more Christians be wise with money and live generously," the spokesman, Brett Weinberg, said in an email to American Banker. "The potential impact on the credit union field of membership simply did not play a factor in the decision to move forward with the member vote."

Carrie Hunt, general counsel and vice president of regulatory affairs for the National Association of Federal Credit Unions, said while she had no comment about Thrivent specifically, "NAFCU supports credit unions and their desire to serve fields of membership that work well for their community and their business plan."

A spokesman for the NCUA said the credit union has not formally sought any change. "We have not received a request from Thrivent about expanding its field of membership," the spokesman, John Fairbanks, said.

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