Mutuals welcome CHOICE’s better banking report
03 March 2011
Abacus – Australian Mutuals, the industry body for credit unions and mutual building societies, today broadly welcomed CHOICE's Better Banking Report.
"CHOICE's recommendations set an agenda that demands a response from industry, Government and other stakeholders," said Abacus CEO Louise Petschler.
"We unambiguously support CHOICE's recommendation for a permanent consumer deposit guarantee properly explained to consumers. Abacus is calling for the current $1 million cap on the guarantee to be maintained permanently.
"The $1 million cap is under review with an announcement due later this year, but any reduction in the cap will only help the four major banks. As CHOICE says in today's report, 'the implicit government guarantee for banks that are 'too big to fail' must have a distorting effect on the financial services market.'
"Abacus also supports CHOICE's call for the removal of barriers to switching home loan products.
"Our market share in new owner occupier home loans has grown to almost 11 per cent in the latest official figures, compared to 6.5 per cent two years ago, so we want to see more power to consumers to shift their home loan.
"Some of CHOICE's other recommendations are subject to current reviews. For example, Abacus is engaging with the review of account portability led by former RBA Governor Bernie Fraser.
"We are also involved in consultations with Treasury about the Government's proposed reforms to credit product disclosure, including credit cards.
"Credit unions and building societies have been providing low-cost banking services to Australian consumers for years. Our market share continues to grow as consumers realise the genuine competitive value that mutuals offer them, and our asset growth reflects this shift.
"There is real demand for more competition in banking. With the right policy settings, credit unions, building societies, regional banks and other smaller banks have the capacity to increase competitive pressure on the four majors.
"CHOICE makes a welcome contribution to this debate," said Petschler.
For more information, please contact:
Pamela Eldridge
Senior Adviser - Media, Public Affairs
(02) 8299 9024; 0423 843 790
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