Interference in member rights condemned
11 August 2006
Abacus - Australian Mutuals, the national association of credit unions and mutual building societies, today condemned attempts to interfere in the upcoming Police & Nurses Credit Society (PNCS) Special General Meeting next week.
Home Building Society, a listed non-mutual ADI, claimed yesterday that PNCS’ proposed constitutional amendments are not "in the interests of Police & Nurses members as a whole".
Abacus General Manager, Adrian Lovney, said the interests of the members of PNCS are best judged by those members.
"Those members must be allowed to decide for themselves," Mr Lovney said.
"Members' rights are sovereign. The Board of PNCS has a responsibility to look after their members' interests - external parties are bound only to look after their own shareholders.
Mr Lovney said Police & Nurses has not received a formal offer from any external party, and that the current public statements are an attempt to influence the vote of members on their own constitution.
"No mutual is immune from takeover, and ultimately members should and do make the decisions about the future of their credit union. But they can only do that if a fully disclosed offer is made, and its risks clearly understood. That is not the situation in Perth today."
Mr Lovney said that credit unions, as mutuals, are the only financial institutions where members - and not shareholders - come first.
"Mutuals such as credit unions are owned by their members," Mr Lovney said. "They are focused on providing the best possible service and products to their members. Banks - even regional banks - are beholden to their shareholders to maximise shareholder profits.
"When credit unions and mutual building societies have been taken over (or turned into banks) in the UK, the higher charges and reduced service have been shown to outweigh the benefits of any payout over time," Mr Lovney said.
"Credit unions consistently top customer satisfaction surveys - banks don't."
Mr Lovney said credit unions and mutual building societies play a strong and important role in the Australian financial services market.
"Collectively, mutuals are the biggest player in Australian banking after the big 5 banks. Over 4.5 million Australians are members of credit unions and mutual building societies.
"With total assets of more than $50 billion, mutual ADIs meet the same high standards of regulation, capital requirements and oversight as the biggest banks.
"It was our industry that repeatedly demonstrated its commitment to regional Australia while the banks were walking away.
