1st 21 Years of Yarrawonga Credit Union

History of Yarrawonga Credit Union Co-operative Limited

As written by Tom Etchells to celebrate the credit union’s 21st Birthday in 1993.

The credit union movement was started by the Mayor of a small town in Germany, his name was Friedrich Raiffeison. He was disgusted with the unscrupulous money lenders who charged high exorbitant rates of interest on the money they lent to farmers and townspeople. The Mayor urged the people to bring what money they could afford and placed it in a common fund. From this fund, any person wishing to borrow for a worthwhile purpose could repay the loan with a very small interest rate.

Records show that in the year of 1972, forty million credit union members were distributed throughout the world in more than 56,000 credit unions. Australia had more than 700 credit unions with total capital of $137 million.

The First 21 Years

Yarrawonga Newspaper Clipping - CMCU
A local newspaper announcement circa 1972.

The origin of Yarrawonga Credit Union commenced at a public meeting held on the 4th July, 1972. Chairman was Councillor Frank Keenan who had called the meeting to discuss the desirability of forming a Credit Union Co-operative in Yarrawonga.

The steering committee that was formed from that meeting was comprised of Cr. Barry Woods (the main organiser of the credit union), Cr Bruce Forge, Don Presley, John Williams, Pat Flanagan, Tony Farey, Roy Loughnan, John Easdown, Brian Power, Gordon Oakley and Mrs. Gloria Begley.

A study was made of the credit unions already established at Benalla, Wangaratta, Kyabram, Shepparton and Numurkah. The success achieved by these five co-operatives convinced the committee that Yarrawonga should have a credit union co-operative. The actual formation took place at a follow up meeting on 1st August, 1972 with registration under the Co-operative Act 1958 and business commenced shortly after the first Board meeting that was held on the 8th September, 1972.

Arrangements were made to have an agency in the office of Young Lambert, Easdown & Company at 38 Belmore Street. The original foundation Board of Directors consisted of Barry Woods, Tony Farey, Don Presley, Tom Etchells, Brian Power, James Campbell and Gloria Begley. At the first Board meeting, John Williams was appointed Secretary/Treasurer. Most of these directors knew very little about the day to day running of a credit union. John Williams found out and guided us through our teething troubles. A great amount of guidance was given by Tony Farey who showed that he had a natural knowledge of organisation and handling of money.

Towards the latter part of the year a Promotions Committee was formed; this committee consisted of Tom Etchells, Gloria Begley and Alan Hayes. This committee moved into top gear with advertising and a fairly good pamphlet.

At the first Annual Meeting in 1973, Yarrawonga Credit Union started with 37 members, Eight months later the membership had reached 71. It must be remembered that we started with no money in 1972 and by 31st March, 1973 we had accumulated $9,234 in savings, $6,600 in fixed deposits and the large sum of $139 in Christmas clubs. The sum of $12,974 was loaned throughout the year with outstandings of $11,202. A quick calculation would show that the balance sheet was fragile, but those members who had borrowed money were very good with their repayments.

The comparison between the total amount in the year 1973 and the assets in 1993 would make people think a mistake had been made. A membership of 71 in 1973 would give a good indication of our strength in 1993 and the number is increasing. The maximum amount lent to members in 1973 was $500 with any amount over this having to be thoroughly examined by the Board of Directors.

Joan OBryan and Tony Farey - CMCU
Original Office Manager Joan O’Bryan and founding and long standing board member Tony Farey.

The Board then decided to move operations to a small office owned by Charlie O’Connor. This office was situated where the State Bank of Victoria (Commonwealth Bank) now stands, but this was a short- term arrangement. This was discussed at a Board Meeting held at the home of Chairman Barry Woods (remembering that we had no permanent office at this stage). During the meeting one director remarked that it was a pity that we could not purchase two shops on one title at 58 Belmore Street as offered to us by Laurie Chipperfield. Barry Woods’ response was “..why can’t we?..” The directors then commenced writing to prominent people in the shire and asked them to invest money in the credit union for which we would pay interest of 10.00%. Between Barry Woods and Tony Farey, they organised a business loan with our Association to purchase the buildings and we proceeded to move in and install our office staff. Joan O’Bryan would open for business from 2pm to 5pm on Monday, Tuesday, Thursday and Friday.

The Directors were learning fast and realised they had the responsibility of operating the credit union on behalf of the members, and that their authority is governed by law and the rules adopted by the members.

The credit union is a group of people with a common bond who agree to save regularly together and then lend these savings to one another at the lowest possible rate of interest. In this way, they assist each other to improve their financial position.

The question of who owns and controls a credit union is explained by saying that it is owned and controlled solely by its members. Each member has only one vote irrespective of who the member is or the extent of their savings in the credit union. No credit union can be operated for personal gain. As a non-profit organisation it returns to members by way of services all money left over after operating expenses are paid and proper reserves have been maintained.

Credit unions are safe because they are required by law to be registered with the Victorian Finance Institutions Commission which is a State Government Department, and Commission Inspectors regularly examine each Credit Union and their operations., Credit Union, by law, are required to engage an independent auditor to verify their accounts and balance sheet annually. At each annual general meeting, the members may elect their own Supervisory (auditing or watchdog) Committee to carry out a continual audit of every aspect of operations of the credit union. This Supervisory Committee is responsible to the members and not to the Board of Directors.

Persons handling credit union funds are required by law to be bonded. This is an insurance cover that protects the credit union from loss that may occur or result from the misappropriation of funds.

The credit union office at this stage looked very like a rabbit warren with pre-fabricated walls that formed tiny offices and desks formed of pressed board and a counter formed a passage that lead to the workshop at the rear. The directors rented this area to an electrician to generate extra income for more alterations that were to be commenced over the next years.

Plans were then being drawn up for renovations to the shop adjacent to the office. A new floor was built and a carpet laid over the area for the solicitor tenant who was to occupy for the next several years. At this stage, all income was very much appreciated.

The year of 1973 saw the election of a credit committee which consisted of Don Presley, Tony Farey & James Campbell. One of the founding directors Gloria Begley did not re-nominate for election and retired for personal reasons. Her place was filled with the election of Elizabeth Barnes to the Board. The pressure of family commitments on the Secretary was relieved with the position of Assistant Secretary being created and filled with the election of Kay Power.

The year of 1973-74 had several changes, the main being the retirement of Secretary John Williams and the election of Peter Ryan. Two directors also retired, these being James Campbell and Don Presley. The loss of John Williams as Secretary was our gain as John had taken over the role of head of the Supervisory Sub Committee, where he would act as watchdog over the accounting and administration systems.

The 1974-75 Annual Meeting had the scene set for the election of Reginald (Joe) Coulthard, Leslie McDuff, Sheila Abnett and RJ (Peter) Reynolds to the Board of Directors. The position of Office Manager was the appointment of Joan O’Bryan whose capable and efficient work kept her in that position until June 1979 when Robert McKeown became Office Manager.

The early figures at that time were savings that grew from $23,224 to $71,682. This represented a disappointing $280.00 per member, for in comparison, Wangaratta Credit Unions was $415 per member. The annual increase in lending grew from $41,889 to $89,279. The total loans since formation totaled $145,221 made to members. It has been recorded that most of these loans has meant money spent in the Shire of Yarrawonga.

The Promotions Committee found at this time that the members had to be educated to the aims of credit unions in as much they were more concerned about the benefits of membership for obtaining loans at very attractive interest rates and not the responsibilities of membership that urges members to save money to service loans. The aims of the directors was to extend the hours of business from a part time basis to a stage where hours of service to the public and members could be 9am to 5pm and employ part time staff.

The directors at this time travelled many kilometers to meet with directors from Beechworth, Seymour, Wangaratta, Numurkah, Shepparton and Benalla. This travelling served to give an insight into problems that credit unions may have been experiencing, and also ideas that we could put to good use.

The tenth year had a change of Chairman of Directors from Phillip Peachey to Lew Leslie. Joe Coulthard was Deputy Chairman and other directors where Harold Hollingsworth, G Pullar, Albert Lee, Ken Stothard and Trevor Lewin. Lew Leslie was Chairman from 1982 to 1988.

The Supervisory Committee, later to have the nomenclature of Internal Audit Committee was under the able guidance of Brian Quinn, who has served eighteen years in this capacity.

The member with the longest record of service with Yarrawonga Credit Union is Tony Farey. Tony has helped in all avenues such as Supervisory Committee, Director, Treasurer and Loans Committee. Queries relating to finance were often answered by Tony Farey.

The longest serving director is Joe Coulthard. Not only in role of director but also joining in concrete work with Tony Farey and Tom Etchells at the rear of the old premises before the first alterations were undertaken to enlarge the working area for the staff who had also grown with Carmel Ryan (O’Kane) being added to the staff.

The second alterations were on a much grander scale that only left the load bearing portions of the building structure that supported the roof. This created improved facilities for the staff that in the beginning could only be described as primitive. The saying “no matter how humble” we could call this home is no more with its outside convenience, crude washing facilities and lean to at the rear made way for a manager’s office, Board Room, large meeting room, computers and electronic equipment linked to Wangaratta, desks and safety counters for dealing with members requirements.

Yarrawonga Credit Union would be excused for boasting that we have worked hard for twenty-one years and done well in a very competitive field.

One member who had a very important role that commenced in the year 1973-74 was Peter Ryan who occupied the position of Secretary. The maxim that states “a good secretary makes a good organisation” is true and Peter was solid in this role until his retirement in 1988. Robert McKeown then took over the position of secretary and despite a high standard set by Peter, Robert gave the position the benefit of his ability until he retired after a service of thirteen years and seven months.

The concept of some people that credit unions are a loose organisation do not realise that although credit unions are autonomous, they are controlled by the same regulations as other financial institutions. Credit Unions are part of the Victoria Credit Co-operative Association, who, in turn are part of the Australian Federation of Credit Union Leagues Limited, who do come under the umbrella of the World Council of Credit Unions. The Directors on the Board of Management of each credit union are in contact with the Boards of other credit unions so not to be isolated.

The directors in 1988 were Lew Leslie, (Chairman), John Gorman, Joe Coulthard, Albert Lee, Tony Farey, Trevor Lewin and Gordon Miller with Secretary Peter Ryan. The office personnel at the time were Robert McKeown, Joan O’Bryan, Sharon Dunne, Chris Nunn and Julie Sharp. The longest serving office personnel were Joan O’Bryan, Robert McKeown and Carmel Ryan.

The Yarrawonga Credit Union office on 58 Belmore Street in 1993 - CMCU
The Yarrawonga Credit Union office on 58 Belmore Street in 1993.

The comparison of loans allocated in years 1972-73 was $12,974 to that allocation in year 1991-92 of $3,208,514 showed the tremendous growth achieved. This amount consisted of loans for purchase of motor vehicles, debt consolidation, home & land purchase and business assistance.

Christmas Club (CUMAC) in 1973 paid out $139 to members, this compared with 1991-92 pay out of $171,479 with interest rate of 7% this being a generous rate of interest in that financial climate. The same year saw approval being granted to operate in New South Wales as a credit union similar to Victoria, this will be advantageous in future years.

The Directors who are to steer the Yarrawonga Credit Union into its twenty-first year of service are John Gorman (Chairman), Tony Farey, Trevor Lewin, Joe Coulthard, James Holland, Lew Leslie and Dario Prighel. Managing Director is John Manns, Loans Manager is Geoff Cameron. Office Personnel are Sharon Hemphill, Brian Dykes, Julie McCabe, Glenn Soutter and Shelley Niewenhout.

The confidence that members express in the credit union can be verified by the deposits that are lodged with it by members. The ability of the credit union to attract these funds is a clear indication that it is very competitive in the financial market. Members have been offered competitive rates and have invested with the credit union in confidence knowing that their deposits will receive a return that is acceptable in the current economic climate. Large deposits have continued to receive very favourable interest rates.