Michigan regulators have given the green light to the organizers of Credit Union Trust to proceed with their plans to establish a new, limited financial institution, and will proceed with those plans by the spring of next year.
As first reported here last summer, Honor Credit Union of Berrien Springs is one of the seven Michigan credit unions who have formed a coalition seeking approval for their new Credit Union Trust institution which will be anchored in Farmington Hills.
Organizers announced Monday they have received approval from the Michigan Department of Insurance and Financial Services, Office of Banking to proceed with their plans.
Robert Sajdak, the President & CEO of the prospective new organization says, "We're pleased and very excited to be moving forward," and adds, "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."
Credit Union Trust plans to open late in the first quarter of 2019 and will be headquartered in leased facilities located at 31155 Northwestern Highway in Farmington Hills.
Organized by a group of seven prominent, Michigan-based credit unions including locally headquartered Honor Crdit Union, the new Credit Union Trust will be both a Michigan limited purpose bank and a credit union service organization (CUSO). This marks the first such entity in the state and is being established to serve the needs of Michigan credit union members. 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.
Sajdak says, "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." He notes, "This is a service whose time has come and it's one our members need."
This 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.
As the new head of the trust, Sajdak suggests, "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."
The organizers are executives of the seven, member-owned credit unions and include:
- Alpena Alcona Area Credit Union, headquartered in Alpena with seven locations
- Community Choice Credit Union, headquartered in Farmington Hills with 20 locations
- ELGA Credit Union, headquartered in Burton with 11 locations
- Frankenmuth Credit Union, headquartered in Frankenmuth with 23 locations
- Honor Credit Union, headquartered in Berrien Springs with 24 locations
- Members First Credit Union, headquartered in Midland with 11 locations
- Team One Credit Union, headquartered in Saginaw with 12 locations.
Credit Union Trust will be regulated by the State of Michigan's Department of Insurance and Financial Services, Office of Banking.