How we are different

Why choose a credit union, mutual bank or building society?

There are so many reasons why you should choose a credit union, mutual bank or building society over a publicly-listed bank. Perhaps the question you should be asking is: “Why am I not choosing a credit union, mutual bank or building society?”

The most important reason for choosing credit unions, mutual banks and building societies is they are mutuals, meaning they put their customers first.

What does that mean? Simply, the mutual structure means that credit unions, mutual banks and building societies are not publicly-listed companies and so, unlike the publicly-listed banks, don’t have the pressure to maximise profits to pay external shareholders.

Instead, they put their profits back into better rates, fairer fees, responsible lending and outstanding customer service.

Credit unions, mutual banks and mutual building societies exist for their members: being mutual organisations, they are fully owned by their members.

Here are some more good reasons why you should switch to customer-owned banking:

Highly-regulated within a sound banking system

Credit unions, mutual banks and building societies are regulated in exactly the same way as publicly-listed banks, because they are all Authorised Deposit-taking Institutions (ADIs). This means all credit unions, mutual banks, building societies and banks are regulated in the same way and meet the same strict, legally-enforceable standards, under the Banking Act and strict oversight by the Australian Prudential Regulation Authority (APRA). APRA’s strict rules on safety and capital continue to apply to all banks, building societies and credit unions to the same high standards.

Government guaranteed

Equally, all credit unions, mutual banks, building societies and banks have the Government guarantee on deposits – so your money is backed by the Australian Government.

Deposits of up to $250,000 with credit unions, mutual building societies and mutual banks are covered by the permanent Government guarantee.

Safe & sound

Credit unions, mutual banks and building societies are prudent and responsible lenders. We have no exposure to the toxic sub-prime loans in the US. Credit unions, mutual banks and mutual building societies have the lowest levels of arrears in the Australian lending market. Our funding base is strong and secure, and drawn mostly from our members’ deposits. We have less exposure to the volatile wholesale markets.

You come first

If you’re a member of a mutual, you become an owner of that organisation.
Our customers are our owners, so we focus on what’s best for our members – not share price movements. As mutuals, we are not under pressure to take risks to maximise record returns for shareholders. We put your interests first.

You benefit

Mutuals deliver through competitive rates, fairer fees, and responsible lending. An ASIC survey released in 2008 reported that credit unions and mutual building societies charge, on average, the lowest overall loans fees in the home lending market.

Outstanding customer service

Our members tell us they like what we deliver: we consistently have the highest levels of customer satisfaction among banking groups according to Roy Morgan Research. The latest Roy Morgan banking customer satisfaction survey (January 2011) confirms that mutuals like credit unions and building societies continue to record market-leading customer satisfaction. For the percentage of each institution’s customers who said they were satisfied, building societies rated 89.2% and credit unions at 86.2%, compared to 75.4% for the banks.

Community focus

The mutual sector in Australia has an incredibly strong track record of being socially responsible lenders, arguably the best in the banking market, as the ethos of mutuality is underscored by social responsibility. It is in the DNA of the mutual ADI sector, as credit unions were founded on the principle of giving back to the community.

Credit unions, mutual banks and mutual building societies are committed to social responsibility, environmental sustainability, and financial literacy both in Australia and further afield; as well as improving the lives of the disadvantaged by supporting programs run by CUFA and WOCCU.

Responsible lending

Credit unions, mutual banks and building societies are prudent and responsible lenders who provide ethical banking – they do not write loans that can’t be paid back or will over-stretch their members.

Mutual ADIs (credit unions, mutual banks and building societies) already work with members with financial difficulties with a range of support measures as outlined in the Government’s recent hardship provisions. Just as importantly, credit unions, mutual banks and building societies make sure that they lend responsibly in the first place. The September 2009 Reserve Bank Financial Stability Review highlighted this fact, with mutuals demonstrating the best credit quality standards in the market.

The Mutual ADI sector is wholly committed to ethical and responsible lending practices that support both their members and their members’ communities – and have been so since the creation of the cooperative mutual banking model.

Further information

If you're looking for a credit union, mutual bank or building society near you Search our Member Directory.

For more on the mutual difference, click here.