CA CEO on Australia Visit: Common Purpose, Different Collaboration

A part of the U.S. credit union delegation during the World Council of Credit Unions’ recent trip to Sydney, Australia takes a break to pose for a photo in front of the city’s breathtaking view.
A part of the U.S. credit union delegation during the World Council of Credit Unions’ recent trip to Sydney, Australia takes a break to pose for a photo in front of the city’s breathtaking view.

One credit union CEO traveling on a World Council of Credit Unions trip to Australia took time to share his perspective after staying in Sydney with a group of fellow industry leaders from across the United States.

Last week, executives from the Customer Owned Banking Association (COBA) guided the U.S. credit union delegation through Australia's complex financial system, where credit unions are subject to the same strict regulation and high taxation as banks.

“There is much that connects credit unions in the United States with credit unions and other mutual financial institutions in Australia,” said Bill Cheney, CEO of SchoolsFirst FCU in Santa Ana, CA—just one of several credit union leaders on the trip. “At the heart of those similarities is our member-owned—and customer—cooperative structure.”

Credit unions in both countries are “fundamentally” in the same line of business and share a common mission and purpose: to help improve the financial lives of members and customers. But Cheney added that it’s useful to understand and experience what makes U.S. and Australian credit unions different from each other.

For starters, Australian mutual banks and credit unions have taken a more collaborative approach to technology. With technology and service improvements, both sides have partnered to build an advanced payment system which has outpaced “the big four” banks throughout the country.

“We learned this is partially because they have a much smaller credit union movement in terms of the number of institutions—only 72—to come together and set an agenda,” Cheney said. “Also, they’ve been forced to collaborate to survive for many years.”

Cheney and the group studied and discussed the fact that Australian credit unions and mutual banks are taxed and also governed by the same rules and regulator as all banks in Australia.

He said the group appreciated the effort the World Council team put into hosting the trip, as well as COBA (the industry advocate for Australia’s customer-owned banking sector and a World Council member organization).

“It is always enjoyable and informational to meet with our friends from Australia,” Cheney said, “and even more so to meet with them in Sydney.”

Joining Cheney and World Council President and CEO Brian Branch were Credit Union National Association (CUNA) President and CEO Jim Nussle, Utah Credit Union League CEO Scott Simpson, Maine Credit Union League CEO Todd Mason, and executives from credit unions and credit union leagues in Washington, Oregon, Indiana, Florida and South Carolina.

Participants studied the interaction and impact of Basel applications, corporate taxation, and digital disruption in a highly concentrated and competitive environment. They looked into capital growth under taxation and an aggressive Basel regulatory framework, including the use of secondary capital.

The group also explored how cooperative banks, credit unions, mutual banks and “friendly societies” all operate under the same umbrella as one voice for customer-owned banking—and the implications that has on the financial cooperative/credit union brand. The number of Australian credit unions has decreased from nearly 400 in 1990 to fewer than 80 today.

“The Australian system is one of the world’s leading systems of the international network, and it provides many comparative lessons for the credit union industry in the United States,” Branch said. “Members of our delegation learned firsthand the impact of alternative taxation and regulation regimes for credit unions. They also experienced in-person what can be gained by advancing digital innovations for their members.”

World Council has posted the following articles covering the entire trip:

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