Key Issues

Abacus is the industry body for the mutual financial services sector, representing credit unions, mutual building societies and friendly societies. Abacus is owned by its member credit unions and mutual building societies and aims to champion the interests of our members and to support the growth and competitiveness of mutuals in the financial services market.

Some current key issues facing the mutual financial services sector are:

Competition

Competition in the banking market remains an integral issue for Australians with the market dominance of the ‘big four’ banks. Credit unions and building societies deliver professional and ethical banking to close to 4.5 million Australians already and these institutions are more essential than ever to maintain competition and give consumers choice. Without credit unions and building societies, consumers would be left out in the cold.

Wholesale funding guarantee & retail deposit guarantee scheme

Abacus strongly supports the continuation of the existing guarantee for deposits of up to $1 million but some changes are needed to the guarantee arrangements applying to large deposits and wholesale funding as the fee structure is anti-competitive.

Abacus is encouraging the Government to facilitate access to funding by mutual ADIs by

• removing anti-competitive aspects of the Government’s fee arrangements for the guarantee of large deposits and wholesale funding; and taking further action to resuscitate securitisation markets;
• promoting public understanding of the prudential regulatory framework and the status of mutual ADIs within that framework;
• reducing the regulatory compliance burden on prudentially-regulated and responsible lenders such as mutual ADIs; and
• supporting smaller ADIs to access wholesale funding through securitisation and other means.

National Consumer Credit Legislation

Abacus supports the aims of the new federal consumer credit laws. A single harmonised regime, a level regulatory playing field for all credit providers, and access to low cost dispute resolution are all welcome and important steps to provide protection to consumers.

Prudential issues

Abacus works on matters arising from the impact of the new Basel II capital accord to deposit insurance and APRA prudential supervision, including liquidity, governance and executive remuneration issues.

Unfair Contracts

Abacus members support harmonised laws that protect consumers from unfair contract terms. We welcome recent changes that more fairly balance the rights of lenders and consumers.