Published: 5th March 2020
What is the difference between a credit union and a publicly-listed bank?
Well, firstly, as a Credit Union, we have a mutual structure, and the first point of business is to focus on our customers. Anyone can join and become a customer. Each customer owns the organisation they belong to, and have a vote in the organisation’s governance.
This means we focus on community banking services that benefit our customers.
Unlike publicly-listed banks, credit unions, mutual building societies, and mutual banks aren’t publicly-listed companies, and so they don’t maximise profits to pay external shareholders. Instead, they put their profits back into outstanding customer service, better products, competitive mortgage rates, and fairer, competitive pricing for their members.
Quick statistics on credit unions, mutual building societies, and mutual banks:
They are focused on benefits for their members – and not profits for shareholders;
They consistently are among the highest levels of customer satisfaction in the Australian banking market;
Provide quality, professional, ethical banking and offer competitive rates and pricing for close to 4 million members across Australia;
Deliver better service, fairer fees, and a true community focus;
And have been known to release new technology to their customers before the major banks. For example, Osko, PayID, and many of the Pays solutions were first launched by organisations in the mutual sector.
Are credit unions safe?
Yes. All credit unions, mutual building societies, and mutual banks are Authorised Deposit-taking Institutions (ADIs) and are regulated in the same way as all other Australian banks. They are regulated by the Australian Securities and Investment Commission (ASIC) under the Corporations Act 2001, and by the Australian Prudential Regulation Authority (APRA) under the Banking Act 1959.
All ADIs – that is, all Australian credit unions, mutual banks, mutual building societies, and banks – meet the same strict, legally-enforceable standards, under the Banking Act and strict oversight by the Australian Prudential Regulation Authority (APRA). APRA’s strict rules on safety and capital continue to apply to all banks, building societies and credit unions to the same high standards.
Deposits in all ADIs of up to $250,000 were guaranteed by the Federal Government on a permanent basis from 1 February 2012.
Do credit unions, mutual building societies, and mutual banks offer the same kind of products as banks?
Yes – we offer all of the same products and services as the major banks. You can check out some of our award-winning products here.
Is there any difference between credit unions, mutual building societies, and mutual banks?
Being mutual ADIs, all credit unions, mutual building societies, and mutual banks have a customer-owned or mutual structure as their business model as well as having closely-aligned values. There may be small differences due to historical or regional differences, but being a customer (member) of any mutual ADI gives you the same exceptional benefits.
Source: Customer Owned Banking Association is the industry body for credit unions, building societies, and mutual banks. COBA is owned by its member institutions and provides representation and advocacy services as well as fraud and financial crimes services.
Any advice given is of a general nature only and does not take into consideration your personal circumstances. Please consider the appropriateness of the advice before acting.