Credit union group wins special purpose bank charter in Michigan
Credit Union Trust was granted state approval to become the first special purpose bank in Michigan.
Through the new bank, Credit Union Trust will offer trust and investment related services to Michigan credit union members. Organizers which includes seven Michigan-based credit unions, formally applied to start the institution last July.
“This is an important step for Michigan credit unions and their members,” Robert Sajdak, president and CEO of Credit Union Trust, said in a statement on Monday. “It’s the culmination of two year’s effort and we’re proud of what we’ve been able to accomplish for all Michigan credit union members.”
Credit Union Trust is a credit union service organization, but also a special purpose bank that provides consumers and credit union members with trust, fiduciary and investment services. It also serves not-for-profit organizations and other community-centered institutions.
When the application was announced last year, bankers complained that it was an overreach by the credit union industry.
“It’s another example of the credit union movement pushing the envelope and going well beyond their statutory mission of serving people of modest means,” Christopher Cole, senior regulatory counsel at Independent Community Bankers of America, said last year.
The Farmington Hills, Mich.-based organization plans to expand beyond serving the members of its seven founding credit unions.
Even though Credit Union Trust is a bank, it will not be insured by the Federal Deposit Insurance Corp., and it will not be a member of the Federal Reserve. It will also not accept deposits or make loans. The entity will be regulated by the bank and trust division of Michigan's Department of Insurance and Financial Services.
“We’re here to serve credit unions and their members in Michigan and we’re doing it by providing value, service and access at a price members can be comfortable with,” John Landis, senior trust specialist, said in a statement.