Credit Unions Charge Lower Exit Fees, confirms ASIC Report
06 April 2008
Credit unions and mutual building societies have had their status as fair and responsible market players confirmed by ASIC’s Review of Mortgage Entry and Exit Fees, released recently by the Treasurer Wayne Swan.
"ASIC’s report shows that, on average, credit unions and mutual building societies charge less than banks and non-ADI lenders in mortgage fees," said Louise Petschler, CEO of Abacus, the peak body for credit unions and mutual building societies.
"Our performance is particularly noticeable in early termination fees, where ASIC’s data says that over half of loans offered by mutuals in the study have no early termination fees, and our average fee of $400 is well below that of our competitors."
According to ASIC, 93% of big bank loans, 83% of regional banks and 65% of non-ADI lender loans have early exit fees. Of the 88 loans from credit unions and building societies in the study, only 45.55% had an early termination fee. See graph below, from ASIC’s report.
Source: ASIC Review of Mortgage Entry & Exit Fees, p 9 No 18 2008 (5 April), at: www.treasurer.gov.au
Credit unions and building societies also charge lower overall fees, according to ASIC’s data. At an average of $1,388.11, credit unions and mutual building societies were charging far less than fees paid by customers of big banks ($2,255.81), other banks ($1,977.96) and non-ADI lenders ($3,627.83) for loans terminating within 3 years.
Credit unions and mutual building societies welcomed the Treasurer’s release of ASIC’s review and encouraged measures to promote fair competition in the mortgage market.
"As mutuals, credit unions and mutual building societies focus on members and their needs, not big profits for shareholders,” said Ms Petschler. “ASIC’s review is a further sign of the great value and competition that credit unions and mutual building societies bring to Australian families, and the responsible and safe alternative they offer."
For more information:
Louise Petschler
CEO, Abacus – Australian Mutuals
0408 239 226; (02) 8299 9036;
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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