Credit unions strong in tough times

Element - - Finance - Adam Gif­ford Per­sonal fi­nance

Be­tween them the 21 credit unions in the as­so­ci­a­tion have 80 ATMS through­out New Zealand, the largest ATM net­work out­side the banks. In com­bined fi­nan­cial vol­ume, credit unions are about the sixth largest fi­nan­cial trans­ac­tor in New Zealand. Credit unions come un­der the reg­u­la­tions gov­ern­ing non-bank de­posit tak­ers, and most is­sue prospec­tuses. They’re nat­u­rally sta­ble - dur­ing the global fi­nan­cial cri­sis no credit union went un­der any­where in the world. They can only lend to a nat­u­ral per­son, so while they can is­sue mort­gages of up to about $300,000, they don’t do the sort of prop­erty de­vel­op­ment loans that dragged down so many fi­nance com­pa­nies. There is also a de­posit limit, set in 1982, so the largest de­posit a credit union can ac­cept is $250,000, but there is a pro­posed change sit­ting on par­lia­ment’s or­der pa­per. “Un­der the credit union model, the de­pos­i­tors own the union,” Lynch says. There are 175,000 mem­bers of New Zealand’s credit unions. John Wal­ters, who chairs the South Auck­land-based Aotearoa Credit Union, says the first credit unions were formed by poor im­mi­grants, in par­tic­u­lar Ir­ish in the United States and Aus­tralia, who were locked out of main­stream banks so formed their own co­op­er­a­tives to pro­vide bank­ing ser­vices. “That’s the model adopted all over the world. It’s usu­ally poor peo­ple. In our case, our clients are 99 per cent Maori, Pa­cific Is­land or mi­grants from places like Africa and In­dia,” Wal­ters says. “Aotearoa is the fastest-grow­ing credit union in the world. We’re proud of that, but it is also a re­flec­tion of the econ­omy and so­ci­ety.” Henry Lynch, the chief ex­ec­u­tive of the New Zealand As­so­ci­a­tion of Credit Unions, says In­ter­na­tional Credit Union Day on Oc­to­ber 20 was a chance for credit unions to cel­e­brate their work.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.