The FDIC board of directors last week authorized federal deposit insurance for Minneapolis-based Thrivent Financial for Lutherans through its wholly-owned subsidiary, Thrivent Financial Holdings.
Approval allows Thrivent Financial to create Salt Lake City-based industrial bank Thrivent Bank, which will merge Appleton, Wis.-based Thrivent Federal Credit Union into the $930.6 million, online-only Thrivent Bank.
Thrivent Federal Credit Union has been trying to convert to a bank since 2021 and is looking to operate nationwide via a digital platform, according to CUToday.info. The former Thrivent Financial Bank converted to a credit union charter 17 years ago. As of March 31, the credit union had $930.68 million in assets and $761.42 million in deposits.
Acting Comptroller of the Currency Michael Hsu supported the application during an FDIC board meeting, saying it would “establish the bank’s foundation, providing infrastructure, comprehensive product and service offerings, established risk and compliance practices, and experienced personnel. Pursuant to a master servicing agreement, the bank would leverage certain resources available through its affiliates’ existing infrastructure. The proposed bank would look a lot like a community bank.”
Independent Community Bankers of America President and CEO Rebeca Romero Rainey noted ICBA and community banks “strongly oppose the approval of deposit insurance applications from industrial loan companies, which present outsized risks to the Deposit Insurance Fund, financial stability, consumers and taxpayers. The FDIC should deny industrial loan company applications to prevent firms from skirting full regulatory oversight and violating U.S. policy separating banking and commerce through the ILC charter.”
The ICBA has previously criticized the ILC exception for allowing large technology firms like Japanese e-commerce firm Rakuten and other commercial firms to own and operate FDIC-insured institutions without the supervision that applies to bank holding companies. Only a handful of states grant ILC charters.
Congress is considering a bill requiring companies acquiring an ILC to face the same consolidated supervision by the Federal Reserve as other bank holding companies. The bill, introduced by Senate Banking Committee Chair Sherrod Brown (D-Ohio), Sen. John Kennedy (R-La.), remains unpassed.
