No need to know a bank at all - 'community banking' not unique

02 February 2006

Australian credit unions have rejected claims from Bendigo Bank that the provision of community banking through its franchise model is somehow “unique”.

“Bendigo has devised and successfully marketed a corporate/franchise structure that requires local communities to invest around $400,000 of their own money in order to access essential banking services” said Adrian Lovney, General Manager, Credit Union Industry Association (CUIA).

Bendigo Bank will make the claims in a national advertising campaign to start tomorrow.

“The Bendigo structure may well be unique, but the concept of banking organisations being owned by the local community for the benefit of the local community has been in Australia for almost 60 years,” Lovney said.

“It’s called a credit union, a mutual where our customers are also our owners.”

Credit unions have been part of their local communities since 1946. Credit unions in Australia serve more than 3.5 million members and have more than $34 billion in assets.

Credit unions are consistently recognised for their contributions to their local community. In 2005, Encompass Credit Union won a NSW Fair Trading Award for its work with Barnados Australia and mecu won a Banksia Environmental Gold Award, one of Australia’s most respected environmental awards, for its goGreen car loans.

Savings and Loans Credit Union in South Australia and its members have to date contributed more than $1.5 million to help upgrade the Adelaide Women and Children’s Hospital. RegionalOne Credit Union in Victoria has provided more than 90 grants to community organisations nominated by its members since 2002. Following the Asian Tsunami, credit unions raised over $1,000,000 through the Credit Union Foundation of Australia.

Bendigo Bank has announced that it will use the Parkdale Community Bank as the centrepiece of its marketing campaign.

“Credit unions congratulate Parkdale Community Bank for putting something back into the local community. This might be unusual for a bank, but providing support to their communities is all part of a day’s work for Australia’s 155 credit unions.” said Mr Lovney.

CUIA and credit unions have recently opposed Bendigo’s claims to register the term “community banking” with IP Australia.

“For credit unions, community banking is not a marketing opportunity or slogan, it defines who we are - member focussed, community owned financial services organisations.”