A group of credit unions in Michigan are forming a limited-purpose bank, named Credit Union Trust, to provide trust services to their members, Crain's Detroit Business reported July 29.
The organizers — Farmington Hills-based Community Choice CU, Alpena-Alcona Area CU, Burton-based ELGA CU, Frankenmuth CU, Berrien Springs-based Honor CU, Midland-based Members First CU and Saginaw-based Team One CU — have a total of 424,000 members, according to the report. The Michigan Department of Insurance and Financial Services accepted the application on July 23 and has 100 days to formally approve the bank's formation.
Credit unions were previously barred from offering trust services directly. Operating a trust bank would allow them to offer wealth and asset management services to members, Crain's Detroit Business wrote.
Robert Sajdak, former senior vice president and group business manager of personal trust activities for Comerica Bank, will serve as CEO of Credit Union Trust, according to the report. The new bank will be headquartered at Community Choice's head office at 31155 Northwestern Highway in Farmington Hills. It will start with six to eight employees and will hire more as business is generated.
The group will provide $5.5 million in capital for the new bank's launch, the opening of which is expected in the first quarter of 2019, Crain's Detroit Business wrote.