Credit unions poised for change

But while the New Zealand credit union movement has plans that are ready to go, they feel they are being stifled by New Zealand government in their attempts to es-tablish a beachhead in the investment and financial planning industries

But while the New Zealand credit union movement has plans that are ready to go, they feel they are being stifled by New Zealand government in their attempts to es-tablish a beachhead in the investment and financial planning industries.

Head of the New Zealand Association of Credit Unions, Doug McLaren, says credit unions will soon be able to offer a raft of savings and investment products. However, the launch of the products will have to wait until the Commerce Ministry approves the changes to regulations governing credit unions.

Currently, credit unions are limited to accepting only $40,000 deposit from individual customers and face other restrictions.

McLaren says the Commerce Ministry has been frustratingly slow in dealing with the issue and the delay is costing the credit unions money.

“The wait is chewing away at the bottom line. We have spent over $100,000 on se-curing our products and marketing scheme on the understanding that everyone would do their part,” McLaren says.

“The Commerce Ministry has had the proposals for six months and has still not done anything.”

McLaren says credit unions will also be able to offer other financial products, includ-ing unit trusts, once the regulations have been altered.

The changes would also clear the way for credit unions to offer financial planning ad-vice.

He says lifting the restrictions will allow credit unions to expand quickly, especially in the retiree market.

“We get many retirees who come in and we can’t accommodate them because they have too much money. Those people then look on credit unions as strange places,” McLaren says.

Meanwhile in Australia, the credit union industry is bracing itself for direct distribu-tion via the Internet under a new joint venture deal to bring online insurance to its three million members.

The peak body for the $20 billion Australian Credit Unions industry, Credit Union Services Corporation (Australia) Ltd (CUSCAL), has entered a joint venture with Na-tional Credit Union Insurance Services (NCUIS) and the US-based CUNA Mutual Group which offers insurance and financial services to credit unions in 50 countries.

The insurance service will be known as finsure.australia.

CUSCAL chief executive Dr Vern Harvey says NCUIS will bring e-commerce expe-rience to the joint venture with its Direct Insurance Network (DIN) which gives credit unions on-line access to a range of insurance companies and products.

"The DIN system allows credit union staff to access on-line insurance quotes from either a single panel of underwriters, issue a policy to a member or instantly make a policy amendment," he said.