Responding To Demand, BECU Introduces Trust Service

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Boeing Employees' Credit Union believes it has become the first credit union in the state of Washington to offer trust services to its members.

The new BECU Trust Co. is a subsidiary of BECU Financial Services-a wholly owned subsidiary of BECU, the fourth-largest credit union in the United States with more than $4 billion in assets.

The new trust company received its official letter of authority March 6, according to its president, Bonnie Pladson.

Pladson, who has worked in the trust business for 19 years at banks and trust companies, said she was hired June 1, 2002, by Helen Hitchcock, who, at that time, was the new president of BECU Financial Services.

"Helen was brought in partly because of her experience in trust services," explained Pladson. "Being one of the largest credit unions in the U.S., there was some internal discussion about offering trust services."

BECU is not the first credit union or group of credit unions to offer trust services, but Pladson acknowledged that for the most part, trusts are foreign territory for the movement.

"A few credit unions have dabbled in trusts, but maybe some haven't been successful because they don't have the right people, or the right focus," Pladson suggested. "Trusts are extremely specialized and they need experienced people."

After BECU hired Hitchcock, she directed a survey to the credit union's members to gauge the level of interest in trust services. The survey found members had a strong interest, so the board of directors voted their approval, said Pladson.

BECU then examined its bylaws, and decided the best way to offer trust services was as a subsidiary of a subsidiary. Pladson said BECU Trust Co. operates under Washington's Department of Financial Institutions Division of Banking, while the credit union reports to the Credit Union Division. "We have our own trust accounting system and our own custodian," she said.

By Feb. 1, Pladson had hired five staff members with a combined 71 years of trust experience.

Conservative Expectations For Year One

BECU Trust Company projects it will administer $15 million in total assets by the end of its first year. Pladson said the estimate is "conservative" because the trust company takes smaller accounts than most banks will, and because of the nature of the business.

"It is a long process. It is not unusual for a trust company to take six to eight months to get an account on the books," she said. "You never know. We could get one account for $15 million. At previous trust companies I worked at, it was not unusual to have individual accounts in excess of $30 million."

Even though BECU Trust Company is a subsidiary of a credit union, it can offer trust services to non-members-up to 49% of its assets. Pladson said the trust group already has had clients who are non-members open accounts with BECU, and she expects that to continue.

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