Would-Be Depositor Offers CU HotMoney

TALLAHESSEE, Fla. - (07/11/05) -- Credit union officials around thecountry are reporting that an individual has been contactingvarious credit unions that may be candidates for conversion tosavings banks in an effort to establish membership for eligibilityfor a potential stock offering after conversion. The Florida CULeague reported several of its credit unions have received theoffer from an individual purporting to be Ben Friedlander, of NewYork, who is apparently affiliated with Pillar Capital LLC, a NewYork investment partnership that specializes in thrifts. Theinvestment company said it has been trying to find out how easy itwas to join a credit union in order to advise its clients aboutpossible investment opportunities when a new credit union seeks acharter change. The ploy is just the latest in which credit unionconversion candidates are attracting so-called hot money from savvyinvestors who seek to get in on the ground floor of what has becomea hot market for initial public offerings of converted creditunions. In some cases, credit unions have doubled their depositssoon after converting to mutual savings banks as investors seek toget in on the ground floor of IPOs with long-timedepositors.