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A Michigan CU has received final approval from the FDIC for the first ever purchase of a bank by a federally chartered credit union.

The landmark ruling Tuesday cleared the way for United FCU of St. Joseph to officially take over Griffith Savings Bank in Indiana, as the NCUA has already approved the deal.

Under the terms of the deal, United FCU will purchase the assets of the struggling bank, but will not take on the charter, which lawyers say would be prohibited. Griffith has also agreed to divest those assets which the NCUA has ruled do not conform with credit union regulations.

The $80 million single-branch bank, located 90 miles from UFCU’s headquarters, will become a branch of the credit union and its customers will become United members.

Officials from the bank had once considered converting to a credit union but the idea was later dropped. Michael Bell, an attorney with Kotz Sangster who worked on the case, told CU Times that UFCU president/CEO Gary Easterling, , came up with the idea of making the first-of-its-kind purchase. “After looking at the concept, understanding it had never been done before, we asked ourselves a rhetorical question, why not?” Bell said.

The transition is expected to be completed in early 2012.