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its business exclusively through trust and fiduciary accounts maintained at third-party
institutions and does not maintain any deposit accounts directly for its customers.

Based on a review of supervisory information, consultations with the OCC,
and information provided by Applicants, the Board has confirmed that Applicants and
Credit Union do not offer or market the deposits of Thrift that are insured by the FDIC.
Thrift does not offer deposit accounts to its customers or make commercial loans. Thrift
also does not obtain payment or related services from a Federal Reserve Bank or exercise
discount or borrowing privileges with any Federal Reserve Bank. Thrift obtains and will
continue to obtain these services and privileges from third-party institutions. Finally,
Applicants and Thrift have committed to abide by each of the section 2(c)(2)(D)
requirements on an ongoing basis.

Compliance with Section 2(c)(2)(D)

The limited affiliations and relationships between Applicants, Thrift, and
Credit Union evidence a degree of interdependence among the institutions.
Consideration has been given to whether these relationships are consistent with the
limitations in section 2(c)(2)(D).

Thrift and Credit Union share only limited back-office services, and each
entity leases its employees from different corporations in the IAA corporate structure.
The back-office services shared by Thrift and Credit Union are on market terms and
conducted in full compliance with each entity’s policies and procedures, and separate
books and records are maintained for Thrift and Credit Union. Thrift also does not have
any management, director, or employee interlocks with Credit Union and has committed
to prevent any such interlocks in the future. The two companies do not share any office
space, advertise one another’s products, or have similar names.

The business relationships between Thrift and Credit Union are limited.
The eight certificates of deposit at Credit Union held by Thrift amount to less than
1.0 percent of Credit Union deposits. Thrift has committed that it will not renew these
certificates when they expire or establish other deposit relationships with Credit Union,
except as strictly necessary to (1) follow or comply with instructions given by a client
concerning the client’s self-directed account at Thrift, or (2) comply with Thrift’s
fiduciary obligations under applicable law. Similarly, Thrift has committed to
discontinue the HSA account arrangement between Thrift and Credit Union and will not
establish other similar arrangements.

Applicants and Thrift have also provided a number of commitments to
prevent Thrift and Credit Union from operating or appearing to operate together. Among
other commitments, Thrift and Applicants have agreed that (1) they will not take any


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arrangement was made at the request of customers of Credit Union and has only been
used once.

The Section 2(c)(2)(D) Factors

Thrift’s charter, originally granted by the Office of Thrift Supervision,
limits Thrift’s activities to those permitted under section 5(n) of HOLA.? Thrift’s
activities are substantially similar to the activities of the subsidiary savings associations
of previous deregistration applicants and have been previously recognized by the Board
as trust or fiduciary activities.!° The Board has reviewed available information to
confirm that Thrift operates only in a trust or fiduciary capacity. Applicants and Thrift
have also committed that Thrift will only engage in activities permissible under section
5(n) of HOLA.

Section 2(c)(2)(D) requires that “all or substantially all of the deposits of
such institution are in trust funds and received in a bona fide fiduciary capacity.”!! The
Board considers the “all or substantially all” requirement of section 2(c)(2)(D) to be met
where 99 percent of all deposits are maintained in a trust or fiduciary capacity,’ not
taking into account the $500,000 in non-trust deposits the savings association must hold
in order to receive federal deposit insurance.'? Thrift meets this requirement: it conducts

9 12 U.S.C. § 1464(n). Thrift provides trustee, executor, conservator, investment advice,
agent, and custodial services. Thrift provides escrow services and holds separately
managed investment accounts as agent. Thrift also acts as custodian for the proprietary
mutual funds advised by Thrift. Credit Union engages in retail banking, bill payment,
mortgage processing and selling, financial counseling and education, health savings
account, and consumer loan activities.

10 State Street Boston Corporation, 81 Federal Reserve Bulletin 297 (1995); JP Morgan
& Co., Inc., 73 Federal Reserve Bulletin 810, 812 and fn. 5 (1987).

1 12 U.S.C. § 1841(c)(2)(D)(i).

2 See Board letter to Raymond J. Manista dated September 26, 2012. See also letter
dated February 28, 1997, from Oliver I. Ireland, Associate General Counsel, to S. Alan
Rosen, Esq., and letter dated May 15, 1996, from Oliver I. Ireland, Associate General
Counsel, to L. Richard Fischer.

13 12 CFR 303.14(a). In order to be chartered as a federal savings association under
section 5 of HOLA, the Office of Thrift Supervision required that the savings association
be FDIC-insured. 12 CFR 552.2-1(b)(3)(i). The Office of the Comptroller of the
Currency (“OCC”) has retained this deposit insurance requirement.

12 CFR 152.1(b)(3)(i).



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action with the primary purpose of inducing a customer of Thrift to become a customer of
Credit Union, or a customer of Credit Union to become a customer of Thrift; (2) Thrift
will not establish deposit accounts with Credit Union and will run off existing deposit
accounts, including certificates of deposit, at Credit Union; (3) Thrift will not engage in
any transactions with Credit Union without the Board’s prior approval; (4) Thrift will
discontinue making any financial contribution to Credit Union; (5) Thrift will not operate
any of its activities in tandem with Credit Union’s deposit-taking activities; and

(6) Thrift will treat Credit Union as an affiliate for purposes of the anti-tying prohibitions
in section 5(q) of HOLA and sections 23A and 23B of the Federal Reserve Act.'4 These
commitments will prevent Thrift and Credit Union from offering a full suite of retail
banking products together, and will eliminate existing arrangements between Thrift and
Credit Union.

Any change in the operations of, or relationships between, Thrift and Credit
Union may result in a different finding regarding Thrift’s compliance with
section 2(c)(2)(D).

Conclusion

Based on the foregoing and all the facts of record, including the most recent
call report and report of examination of Thrift and consultation with the OCC, the
General Counsel and the Director of the Division of Supervision and Regulation, acting
pursuant to authority delegated by the Board, have approved the application by
Applicants to deregister as SLHCs. This action is taken in reliance on all the facts of
record, including all the representations and commitments made to the Board in
connection with the application. These representations and commitments constitute
conditions imposed in writing in connection with the approval of Applicants’ application
to deregister as SLHCs and, as such, may be enforced in proceedings under applicable

4 12 U.S.C. § 1464(q) (anti-tying prohibitions); 12 U.S.C. §§ 371c and 371c-1
(transactions with affiliates).


BoaRrp or GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Wasuincton, DC 20551

May 10, 2017

Mr. Michael K. Renetzky
Locke Lord LLP

111 South Wacker Drive
Chicago, Illinois 60606

Dear Mr. Renetzky:

This is in response to the application by Illinois Agricultural Association
(“IAA”), Illinois Agricultural Holding Co., and COUNTRY Life Insurance Company
(together, “Applicants”), all of Bloomington, Illinois, to deregister as savings and loan
holding companies (“SLHCs”) pursuant to section 604(i) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act! (“Dodd-Frank Act”) and the Board’s Regulation
LL Applicants seek to deregister on the basis that their subsidiary federal savings bank,
COUNTRY Trust Bank, FSB (“Thrift”), Bloomington, Illinois, qualifies as a trust-only
company pursuant to section 2(c)(2)(D) of the Bank Holding Company Act.

Background

Section 604(i) of the Dodd-Frank Act amended the Home Owners’ Loan
Act! (“HOLA”) to exclude from the definition of an SLHC a company with a subsidiary
savings association that functions solely in a trust or fiduciary capacity as described in
section 2(c)(2)(D).° Under section 2(c)(2)(D), the term “bank” does not include an
institution insured by the Federal Deposit Insurance Corporation (“FDIC”) that
“functions solely in a trust or fiduciary capacity” if it meets all of the following criteria:

| Pub. L. 111-203 (2010).

2 12 CFR 238.4(d).

3 12 U.S.C. § 1841(c)(2)(D).

4 12US.C. § 1461 et seq.

5 12 U.S.C. § 1467a(a)(1)(D) GID.


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law. Any change in the representations or commitments may result in a different
conclusion and should be reported to Board staff promptly.

Sincerely yours,

AN aye Munda

Margaret McCloskey Shanks
Deputy Secretary of the Board

cc: Office of the Comptroller of the Currency


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i, all or substantially all of the deposits of such institution are in trust
funds and are received in a bona fide fiduciary capacity;

ii. no deposits of such institution which are insured by the [FDIC] are
offered or marketed by or through an affiliate of such institution;

iii. such institution does not accept demand deposits or deposits that the
depositor may withdraw by check or similar means for payment to
third parties or others or make commercial loans; and

iv. such institution does not —

I. obtain payment or payment related services from any
Federal Reserve bank, including any service referred to
in section 11A of the Federal Reserve Act; or

IL. exercise discount or borrowing privileges pursuant to
section 19(b)(7) of the Federal Reserve Act.°

An institution that meets these requirements may nevertheless not function
in a trust-only capacity if it operates or appears to the public to operate together with
another depository institution that does not meet the requirements of section 2(c)(2)(D).
Before granting a request to deregister an institution pursuant to section 604(i) of the
Dodd-Frank Act, the Board examines the relationship between the institution claiming to
meet the requirements of section 2(c)(2)(D) and any other depository institutions with
which it has material affiliations or relationships.

Thrift and other affiliates of Applicants that provide investment and
insurance products operate under the trade name “COUNTRY Financial.” Applicants
and the COUNTRY Financial companies maintain certain relationships and affiliations
with the [AA Credit Union (“Credit Union”), Bloomington, Illinois, which serves the
employees and customers of Thrift and the other COUNTRY Financial companies.”
Applicants and Thrift do not have any stock or ownership interest in Credit Union, and
Thrift does not have any officers, directors, or employees in common with Credit Union.
However, Applicants and Thrift have established limited business relationships with
Credit Union.

6 12 U.S.C. § 1841(c)(2)(D).

7 Membership in Credit Union is also available to members and employees of IAA;
policyholders of Thrift’s insurance affiliates; customers of Growmark, Inc.; other small
employee groups; and the family members and retirees of these groups.


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Thrift leases its employees and receives administrative and operational
services from CC Services, Inc. (“CC Services”), a wholly owned subsidiary of IAA.
Credit Union also receives limited human resources administrative services from CC
Services. CC Services maintains separate books and records for each entity, and
separately provides its services in accordance with the risk-management and regulatory
policies and procedures of each institution. The common back-office arrangements are
not evident to the public. Credit Union leases its employees from IAA under a
management services agreement which grants IAA authority to hire, terminate, and set
compensation and benefits for Credit Union employees. No employee leased by Credit
Union provides services to, or is leased by, Thrift. In addition, there are no management,
director, or employee interlocks between Thrift and Credit Union.

Thrift and Credit Union operate in separate locations, do not share similar
names, and generally do not market one another’s services to the public or their own
customers. Exceptionally, Thrift purchases banner advertisements that sometimes appear
on Credit Union’s website. Under commitments provided by Thrift, this arrangement
would cease.

Credit Union maintains a webpage dedicated to COUNTRY Financial.
This webpage and the websites that are linked on this webpage do not discuss Thrift
specifically. There do not appear to be references to the services of Credit Union on the
COUNTRY Financial website or in Thrift’s marketing materials, and the Credit Union
website does not specifically discuss Thrift or its services. Credit Union uses the
COUNTRY Financial trademark for branded credit cards and Thrift also uses this
trademark for all of its marketing materials. Credit Union does not use this mark for
other purposes, and Thrift and Credit Union do not otherwise use common or similar
trademarks.’ Thrift and Credit Union share some customers, but Applicants and Thrift
have committed not to take any action that will encourage Thrift’s customers to become
customers of Credit Union.

Thrift currently holds eight certificates of deposit at Credit Union on behalf
of its fiduciary clients. Thrift also has agreed to automatically receive funds in excess of
certain thresholds from the HSA accounts of two customers held at Credit Union. This

8 Credit Union and IAA are parties to several trademark agreements permitting Credit
Union to use the “COUNTRY” name, mark, logo and design, and the “What’s your idea
of financial security” mark and slogan, both of which are used by Thrift and Thrift’s
affiliates. Credit Union only uses these marks for certain branded credit card products.
Credit Union also has the right to use certain other trademarks of IAA for branded credit
cards offered by Credit Union. Thrift is not party to any of these agreements.