Heritage CEO says reforms help make banking sector fairer and more competitive

Federal Government reforms announced today will help create a fairer and more competitive banking sector that will ultimately deliver benefits to customers, according to Heritage Building Society CEO John Minz.

Mr Minz welcomed the measures contained in the Treasurer Wayne Swan’s banking package that will give mutuals - building societies and credit unions - fairer access to funding sources.

“These reforms mean the mutual sector is now better placed to act as the ‘fifth pillar’ of Australian banking by providing greater competition to the four major banks,” he said.

“In the past, the big banks have benefitted from government decisions that have given them access to sources of funding at cheaper rates. That made it more difficult for mutuals to be as competitive as they could be in offering lower interest rates and better choice to consumers who are sick of the big banks.

“A perception has also been created that the banks are somehow safer than mutuals.

But the reality is that credit unions and building societies are strong, secure and regulated the same way as banks.

“This reform package is a step forward in removing these barriers, creating a fairer playing field for Australia’s 120 mutuals, and positioning them to offer the kind of competition to the big banks that the marketplace has been calling for.

“Initiatives that help credit unions and building societies to compete on a level-playing field will help to keep the big banks honest and give customers a real choice.”

* Based on a $150,000 loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.