Crain's Detroit Business is reporting that seven Michigan credit unions have applied to thier state regulator to form a new limited-purpose bank to provide trust services.
Operating a trust bank will allow these credit unions to offer wealth and asset management services to members. Credit unions are not allowed to directly offer wealth and asset management.
The organizers of the new bank, Credit Union Trust, are: Farmington Hills-based Community Choice Credit Union; Alpena Alcona Area Credit Union; Burton-based ELGA Credit Union; Frankenmuth Credit Union; Berrien Springs-based Honor Credit Union; Midland-based Members First Credit Union; and Saginaw-based Team One Credit Union.
The credit union group will supply $5.5 million in capital to launch the new bank, which is expected to open following regulatory approval in the first quarter of 2019.
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Will the new bank pay federal taxes? What kind of leverage can it support on 5.5 million of capital?
ReplyDeleteIt should. But it will depend on how it is organized for tax purposes.
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