Wanna Be a Millionaire? Convert Your CU to Bank

FIFE, Wash. – A group of seven former volunteer directors at Rainier Pacific CU have each accumulated stock in the credit union-turned bank in just a few years worth at least $1 million–the benchmark for a middle-class retirement next egg. The seven former volunteers, who have stoked up on initial public stock offering purchases, stock grants, and options since the ex-credit union went public, continue to sit on the board of what is now Rainier Pacific Bank, emblematic of the growing number of ‘credit union millionaires’ being created by the conversions to banks, according to documents filed with the Securities and Exchange Commission. The switch from credit union to bank has created more than three dozen credit union millionaires like the Rainier Pacific Seven, which includes: Edward Brooks, who owns 82,000 shares worth $1.8 million; Stephen Bader, Robert Coombs, Brian Knutson, Alan Somers and Alfred Treleven, all who own more than $1.4 million in Rainier Pacific stock and options, and Charles Cuzzetto, who owns about $1 million. Brooks, the one-time credit union volunteer and the CEO of a local construction company, was paid $108,000 last year to sit on the board, including $54,400 in stock and $28,800 worth of options. The Rainier Pacific insiders, five of whom were brothers in the local Rotary Club, engineered the January 2001 conversion from credit union and subsequent August 2003 initial public offering, one of the most lucrative yet for directors and managers of a converted credit union. The biggest winner in the conversion sweepstakes, was Rainier Pacific’s President John Hall, who has accumulated almost $4 million in stock and options in less than four years. Rainier Pacific’s Sr. Vice President Victor Toy has accumulated almost $3 million, and its CFO Joel Edwards more than $2 million. Other CEOs who converted their credit unions to banks have also built up multi-million dollar holdings: like John Fiore, the president of Synergy Financial Group (once Synergy FCU), more than $4.2 million in stock and options; Hans Ganz, the head of Pacific Trust Savings Bank (Pacific Trust FCU), more than $4 million; and Kay Hoveland, CEO of K-Fed Savings Bank (Kaiser Permanente FCU), who has built up more than $2 million in holdings.