Hot Money Finds CU ConversionProspects

WALL STREET - (02/08/06) – Speculators in mutual thriftstocks are finding their way to deposit funds in prospective creditunion-converts, even before the credit unions have changed over tomutual savings banks. Several investors who specialize in thriftstocks said they have made deposits in pending credit unionconversions, including Community CU, OmniAmerican CU, and even DFCUFinancial, the $1.8 billion Dearborn, Mich., credit union in theprocess of converting charters. “We’ve got money inDFCU,” one Wall Street speculator who did not want to beidentified, told The Credit Union Journal. The deposits enable theinvestors to get in on the ground floor of any future initialpublic offerings, for which depositors are given first priority.Most of those IPOs can be counted on to appreciate significantly inthe days and weeks after hitting the market. “There are someinvestors who try to make deposits in some of these institutions inthe hopes that they will go public,” said Mike Schaller, ananalysts with SNL Financial, a Charlottesville, Va., consultingfirm which provides lists of credit unions that are potentialcandidates for conversion, even before the credit unions haveapplied to switch charters.