Mutual Banking Code of Practice

 

 

Central Murray Credit Union Limited

members put first again under new

Mutual Banking Code of Practice
 
 
 
 
Central Murray Credit Union members will be among the first Australians to be protected under a new Code of Practice for credit unions and building societies that reflects how they deal with their customers and members.
 
The new Mutual Banking Code of Practice was developed for Australian credit unions and building societies by industry body Abacus – Australian Mutuals. The Code clearly sets out the rights of members and the responsibilities of their lenders.
 
“Central Murray Credit Union has already signed up to the new Mutual Banking Code of Practice. There are many compelling reasons for people to bank with us – and the Code sets them out in plain English.” says CEO John Pattison.
 
The new Mutual Banking Code of Practice draws on existing lending practices in the industry, and puts into print the expectations of both lenders and members where service, advice and price are concerned.
 
“Credit unions and mutual building societies in Australia offer a genuine and competitive alternative to the banks” says Abacus CEO, Louise Petschler.
 
“Credit unions and mutual building societies continue to take the lead where responsible lending is concerned – and the new Mutual Banking Code of Practice puts into writing the guidelines for real service and value for Central Murray Credit Union members. At Central Murray Credit Union we’ve always been community-focused and the new Mutual Banking Code of Practice sets out in plain English the responsible approach we take in meeting our members’ needs,” says John Pattison. 

Mr. Pattison stated that for easy reference, the new Mutual Banking Code of Practice has been broken down into 10 key promises that all accredited credit unions and mutual building societies must adhere to. The 10 key promises are:

       1.      We will be fair and ethical in our dealings with you
2.      We will focus on our members
3.      We will give you clear information about products and services
4.      We will be responsible lenders
5.      We will deliver high customer service and standards
6.      We will deal fairly with any complaints
7.      We will recognise member rights as owners
8.      We will comply with our legal and industry obligations
9.      We will recognise our impact on the wider community
10.  We will support and promote this Mutual Banking Code of Practice
 
 
Click here to view the mutual banking code of practice in more details.
 
 
Questions & Answers
 
1. Why have Australian credit unions and mutual building societies introduced a new Mutual Banking Code of Practice. Is it a response to the global financial crisis?
 
Credit unions and mutual building societies have always been ethical and responsible lenders who meet the needs of their members and consumers, so the new Mutual Banking Code of Practice puts in writing how we deal with our members and consumers, and why they should do business with us. These are difficult economic times and it’s important to us that our members feel supported and know exactly where they stand, and that it’s explained to them in plain English. 
 
Credit unions and mutual building societies have always been responsible lenders. The new Mutual Banking Code of Practice simply puts into print the way credit unions and mutual building societies have always behaved.
 
Fast facts: Credit unions and mutual building societies have always been responsible lenders and this is reflected by continually low arrears rates of between 0.1 per cent and 0.4 per cent, the lowest bad debts in the Australian banking market. (Figures collected from the Reserve Bank of Australia’s Financial Stability Review March 2009).
 
2. The new Mutual Banking Code of Practice is voluntary, so why did CMCU want to sign the Code?
 
We see this as an opportunity to promote our responsible lending practices and reaffirm to our members what we already practice: responsible, ethical and member-owned lending. The Mutual Banking Code of Practice doesn’t require us to change our behaviour, but it will outline to our members how they can expect us to behave.
 
The new Mutual Banking Code of Practice is a great way for us to communicate to our members that they are always top of mind and that their needs come first.
 
3. How will the new Mutual Banking Code of Practice protect CMCU members?
 
The new Mutual Banking Code of Practice outlines to members 10 key promises addressing the way we will regard, service and communicate with our members.
Consumers can refer to the Code if they are seeking redress as a legal document.
 
4. What will change for CMCU members as a result of the new Mutual Banking Code of Practice?
 
Members and consumers won’t notice any change to the services they receive, or with the way their accounts are handled. 
 
Where consumers might notice a difference is in the way we communicate with them. The new Mutual Banking Code of Practice will ensure that members do not receive unsolicited offers for credit they don’t have the capacity to repay.
 
Terms and conditions will always be distinct from any advertising or promotional material so a description for a special offer isn’t mistaken for legal terms and conditions.
 
5. Will the new Mutual Banking Code of Practice result in higher fees for members?
 
No.
 
The new Mutual Banking Code of Practice will have no impact on the fees paid by our members.
 
ASIC reported in 2008 that Australia’s credit unions and mutual building societies charge, on average, the lowest overall loan fees in the lending market.
 
6. What are the most important aspects of the new Mutual Banking Code of Practice?
 
·      The terms of the new Mutual Banking Code of Practice will ensure that we always lend responsibly and assist you if you are struggling to meet repayments
·      The new Mutual Banking Code of Practice ensures that guarantors are equally protected
 
7. Will the new Mutual Banking Code of Practice put pressure on smaller credit unions or building societies to merge with larger institutions?
 
The terms outlined in the new Mutual Banking Code of Practice are based on behaviours and practices that most credit unions and mutual building societies already adhere to. Subscribing to the Mutual Banking Code of Practice will have the same impact on all credit unions and mutual building societies, whether big or small.
 
8. Will the new Mutual Banking Code of Practice make credit unions and mutual building societies a safer option than the banks for consumers?
 
Australian credit unions and mutual building societies are just as safe as the big banks. The introduction of the new Mutual Banking Code of Practice will give our members a solid agreement that we will always put their needs first ahead of ours.
 
Australian credit unions and mutual building societies are also the first lenders to have reviewed their lending practices to ensure that their policies and procedures match the current lending environment, ahead of the banks and ahead of the Australian Government’s consumer credit reforms.
 
9. How will the new Mutual Banking Code of Practice affect the way CMCU interacts with the community?
 
The new Mutual Banking Code of Practice will have no bearing on the way we interact and support our local community. As a credit union, supporting our local members and community will always be important to our business, as it is one the founding principles of member-owned institutions like ours: giving back to our communities.