The fifth pillar in banking

The Treasurer’s Economic Note of 28 November talks about another banking system pillar based on CUBS:

Next month, I’ll announce a new package of reforms to further promote competition in the banking sector and build on the action we’ve already taken. I’m determined to see another pillar in our banking system built from the combined competitive power of our mutuals, credit unions and building societies, because I’ve always been a big believer in their capacity to be a strong force for competition in the banking sector. Australia has 104 credit unions and 9 building societies, with around 4.5 million members, who, collectively, are the fifth largest holder of household deposits in the country. Some mutuals offer mortgage rates as much as 1 percentage point cheaper than the big banks, with independent analysis by InfoChoice showing that borrowers could save over $30,000 over the life of their loan if they switch to a credit union or building society. But most importantly, mutuals are not-for-profit lenders – so unlike the banks they make it all about their customers and not about grabbing profits – they put their profits back into cheaper rates, lower fees, and better customer service – and their higher customer satisfaction ratings are the proof of the pudding.

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