FARMINGTON HILLS, Mich.–This state’s regulator has given the OK to a charter for what will be both a CUSO and a limited-purpose bank.
Organizers of Credit Union Trust have received approval from the Michigan Department of Insurance and Financial Services, Office of Banking to proceed with plans to establish the new, limited purpose financial institution. Credit Union Trust plans to open in late Q1 2019 and will be headquartered in leased facilities located at 31155 Northwestern Highway, Farmington Hills, Mich., according to the DIFS.
Organized by a group of seven Michigan-based credit unions, Credit Union Trust will be the first entity chartered in the state as both a Michigan limited purpose bank and a credit union service organization.
“It is the first such entity in the state and is being established to serve the needs of Michigan credit union members,” organizers said in a statement. “While credit unions routinely provide a range of wealth management services for their members, they were unable to directly provide fiduciary services such as trusts, until a 2016 change in Michigan law.”
That change marked the start of organizers' planning, they said.
‘The Real Work Begins’
"We're pleased and very excited to be moving forward," said Robert Sajdak, prospective Credit Union Trust President and CEO as named in the application, in a statement. "As we said back in July when we announced our application, now that Credit Union Trust is formally approved, once it is organized the real work begins and we will soon begin hiring professionals, implementing plans and contracting for systems and services.
"We know our members, the market, and the industry. We will begin immediately implementing a tightly-focused business plan to serve the needs of our founding credit union members, and all Michigan credit union members who previously had to go outside the familiar credit union family for trust services," Sajdak continued. "This is a service whose time has come and it's one our members need."
According to organizers, the new organization is an important step for Michigan's approximately 5.23 million credit union members and the industry as a whole. Baby Boomers are expected to transfer $30 trillion in assets to their heirs over the next few decades and a trust provides them a way to avoid the time and expense of probate court, as well as a way to minimize estate taxes, said organizers.
The Seven CUs Involved
"At a time when many traditional banks and trust companies are raising minimum requirements to more than $1 million dollars, Credit Union Trust is focused on serving all members and will administer a much fuller spectrum of trust accounts and balances," Sajdak added.
Credit unions involved in the new CUSO include Alpena Alcona Area CU in Alpena, Community Choice CU in Farmington Hills, ELGA CU in Burton, Frankenmuth Credit Union in Frankenmuth, Honor CU in Berrien Springs, Members First CU in Midland, and Team One CU in Saginaw.