What is a Credit Union
Nationwide there are approximately 130 credit unions and mutual building societies, servicing more than 4.5 million customers and managing over $65 billion in assets. More importantly, credit unions offer the Australian public a different style of banking.
Unlike most other financial service providers, credit unions are mutuals, which means each member is both a customer and an owner of the organisation.
On joining a credit union, each customer purchases a ‘member share’, which entitles him or her to an equal opportunity to participate in the decision-making processes of the credit union. As a shareholding member you are able to vote at the organisation’s Annual General Meetings and, in doing so, participate in the election of the Board of Directors.
Credit union members are also eligible to stand for a position on the Board – although the current regulatory environment does require some basic eligibility criteria to be met.
It is this unique business model that sets credit unions apart from their main competitors and ensures that the institutions remains focused on member needs and not on driving higher shareholder returns.
Like the banks however, credit unions are Authorised Deposit-taking Institution (ADI), regulated by the Banking Act 1959 and supervised by the Australian Prudential Regulation Authority (APRA).
So in terms of their stability and the security of members’ money, they are as safe as a bank.
Credit union’s participation in the Australian financial services arena is about more than just being like a bank. It is about community, social responsibility and collective strength.
Often formed by industry or community groups, credit unions generally seek to deliver better-priced, more accessible financial services to their members. It’s their “people before profit” philosophy that sets credit unions apart from other financial service providers.
