When Thrivent Financial Bank became Thrivent Federal Credit Union in December 2012, it felt more like a homecoming than a radical departure. Granted, it was an unusual homecoming.
The bank that became a credit union actually had its origins in the credit union movement.
Back in 2001, two entities—the Lutheran Brotherhood and Aid Association for Lutherans—merged to form Thrivent Financial for Lutherans. The newly merged entity found itself with five financial institutions to manage—three credit unions, a trust bank, and a community bank. At that time, a thrift charter offered the most flexibility and made the most sense, so Thrivent Financial Bank was born.
Thrivent Financial for Lutherans now sponsors Thrivent Federal Credit Union, which has its headquarters in Appleton, Wis. Its field of membership (FOM) is made up mostly of members of Thrivent Financial for Lutherans and their families.
“Thrivent Financial is a not-for-profit membership organization—like a credit union—so its members understand and appreciate the value of that model,” says Todd Sipe, credit union president/CEO.
With about $500 million in assets and nearly 45,000 members, Thrivent Federal Credit Union is now one of the largest faith-based credit unions in the U.S.
The changing regulatory landscape was the primary impetus for the bank-to-credit union conversion. When the Dodd-Frank Act combined regulatory agencies in 2011, Sipe and his team didn’t think things would change that much.
“Dodd-Frank put costly regulatory burdens on life insurers—like Thrivent Financial—that owned and operated full-service banks,” says Sipe. “It would have been expensive to meet all those regulatory requirements. We concluded that the credit union model was a better fit. We were already connected with members of Thrivent Financial and believed we could better serve them as a member-owned credit union.
“The conversion also enabled us to be a faith-based organization; you can’t be a faith-based bank,” Sipe adds. “Connecting Christian values to finances is really important to our members and potential members. That’s why many of them choose to do business with us. As a credit union, we’re able to offer very competitive rates and fees, and our members know we’re here to help them make wise financial decisions.”
A long road
The preparation, planning, and approval process for the bank-to-credit union conversion took about two years.
“The approval process was much more complex than we expected,” says Sipe. “We were just the first or second stock bank to convert to a credit union, so the process wasn’t mature or well-defined. We were working with five regulatory agencies at a time when the U.S. was reeling from a major recession.”
As they filed their NCUA application, Sipe, his senior leadership team, and supporting staff simultaneously created a project plan to manage the approval process, rebranding, product line changes, and conversion weekend. “It was a significant project with all the moving parts,” says Sipe.
“We closed down at midnight on Nov. 30, 2012, and opened at 12:01 a.m. on Dec. 1 as a credit union,” he says. “We kept the same routing and transit number and core operating system because we wanted the conversion to be seamless for members, and it was.
“We also rebranded our website and took the opportunity to make some enhancements. Members saw easy-to-find account log-ins, simpler navigation, and tools for members who like to do additional research online,” says Sipe.
“Navigating through these waters and coming out with a successful conversion was one of the most rewarding experiences of my career, and forming our new board was probably the most enjoyable part,” says Sipe.
Sipe looked for demographic diversity and ended up with a fairly young board. “The talent we were able to recruit was a real bright spot,” he notes. “We have a wide range of experience and skills on our board, including those with marketing, regulatory compliance, and sales experience. One director is a local pastor who helps us stay true to our faith-based values. Our entire board is focused on helping members be wise stewards of their money.”
The credit union has had a strong first year. “We met our membership goals and exceeded our revenue and profit goals,” says Sipe. “It puts us on a solid foundation for the future.”
JUDY DAHL is a free-lance writer in Madison, Wis.