MELBOURNE/SYDNEY, Australia.–A delegation of U.S. credit union and association executives visited Australia as part of a trip organized by the World Council of Credit Unions. According to WOCCU, the week was to be a “deep-dive examination of how financial cooperatives (in Australia) are working to overcome regulatory, taxation and branding challenges to grow membership and lead the way in developing innovative digital solutions.”
In addition to WOCCU President/CEO Brian Branch, other members of the delegation included CUNA President 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 from California, Washington, Oregon, Indiana, Florida and South Carolina.
Executives from the Customer Owned Banking Association (COBA), World Council’s member organization in Australia, guided the delegation through the country’s complex financial system—where credit unions are subject to the same strict regulation and high taxation as banks, WOCCU said.
What Will be Studied
“Participants will study the interaction and impact of Basel applications, corporate taxation, and digital disruption in a highly concentrated and competitive environment,” WOCCU stated. “They will look into capital growth under taxation and an aggressive Basel regulatory framework, including the use of secondary capital. The group will explore 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.”
WOCCU said the number of Australian credit unions has decreased from nearly 400 in 1990 to fewer than 80 today. The team also will be exploring the success Australian credit unions have had in collaboratively developing innovative digital payment systems to respond to the demands of their members in a highly digital market, WOCCU said.
WOCCU reported COBA will host presentations and foster discussion on several key topics facing Australian credit unions, including:
- Managing credit union growth and capital without tax-exempt status
- Operating under a strict interpretation of Basel III regulations
- Credit-union branding challenges and lessons
- Board governance and best practices
- Payment systems and digital innovation
The U.S. delegation also will make field visits to COBA-member credit unions in Melbourne and Sydney to learn how the challenges are being addressed at the branch level.
“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. Members of our delegation will learn firsthand the impact of alternative taxation and regulation regimes for credit unions,” said Branch. “They will also experience in person what can be gained by advancing digital innovations for their members.”
On Day Two of the visit, Australia’s regulatory and legislative environment was the topic of focus, including what was learned following the findings of the Royal Commission, according to WOCCU.
At right, COBA CEO Michael Bradley leads executives during a series of presentations.
Customer Owned Banking Association CEO Michael Lawrence told the delegation Australia’s current regulatory environment is a unique case study for other nations to learn from.
“Australia’s financial services sector is in an uncommon position right now,” said Lawrence. “There is unprecedented regulatory scrutiny on the entire financial services sector, innovation in new forms of payment like the New Payments Platform as well as a looming federal election where banking reform will be a key election commitment. We’re thrilled to be able to host our international colleagues and introduce them to some of the aspects of financial services regulation in Australia.”
‘Fascinating to Hear’
WOCCU’s Branch said the discussions fostered by COBA have been extremely valuable.
“It has been fascinating to hear about Australia’s regulatory landscape after such a significant inquiry like the Royal Commission. Australia’s customer owned banking institutions are certainly operating in unusual circumstances and provide a terrific example for our global colleagues,” said Branch.
Added CUNA CEO Jim Nussle who is part of the delegation, “There is much to learn from the Australian example. The presentations and insights from COBA have demonstrated how important effective advocacy is towards achieving competition in a financial sector.”
On Day Three, CUNA CEO Jim Nussle provided an update for credit unions in this country on what has been taking place in the United States. Nussle specifically focused on CUNA’s efforts advocacy for and promotion of credit unions in the U.S.
“Credit unions in the U.S. have seen many positive trends in 2018 – from membership growth to increased financial benefits for both members and non-members,” Nussle told the meeting. “The credit union difference is our cooperative superpower. It’s our best asset, our competitive advantage, and it extends across the globe.”
Nussle told the assembled group U.S. CUs provided more than $16 billion in benefits to American consumers, members and non-members alike. The industry also added nearly five million members and grew five times faster than the U.S. population during 2018.
Nussle further provided an overview of the advocacy pillars that CUNA plans to tackle in the 116th Congress, namely enhancing information security, preserving the tax status, expanding opportunities for consumers and small businesses and continuing to reduce regulatory burden.