Credit Union members value mutuality
17 August 2006
Last night’s vote by members of the Police & Nurses Credit Society (PNCS) in Perth to stop carpetbaggers from influencing the future of their credit union is good news for credit unions and mutual building societies across Australia.
Abacus – Australian Mutuals, the Association of Building Societies and Credit Unions, has welcomed the vote by members of PNCS as a clear signal that members value belonging to a mutual.
PNCS member last night voted to amend their constitution to introduce qualifying periods for new members to be able to profit from any future corporate activity such as a demutualisation or takeover.
"This is a message that anyone wanting to launch a hostile demutualisation of a credit union or mutual building society cannot ride roughshod over our members’ rights," said Abacus General Manager Adrian Lovney.
"These kinds of measures don’t prevent genuine reconstruction proposals being put to members of mutuals," said Mr Lovney. "The direction and future of their institution are decisions for members – fully informed, and with due process – to determine."
"But credit unions and mutual building societies are not going to welcome new members chasing a quick buck at the expense of existing members," Mr Lovney said.
In an environment of increasingly aggressive takeover tactics and interest, Abacus is working with its member organisations to ensure that the genuine interests of members of mutuals and their rights are paramount in any proposals or debates.
"No credit union or building society is immune from takeover, and members of mutuals should and will make decisions about their organisations’ future. What this vote says is that the members of Police & Nurses are determined to do just that, without any interference from third parties."
Mr Lovney said members value mutuals, such as credit unions and building societies, for the fairer fees, personalised service and community support they provide.
"Mutuals are owned by their members – our customers are our owners. Banks are beholden to external shareholders to generate a profit and pay dividends. At a mutual, all the profits are directed towards providing benefits to members," he said.
"Over four and a half million Australians experience and value the different kind of banking that credit unions and mutual building societies offer. Competition, choice and service standards are enhanced because of the role of mutuals in Australian banking."
