SYDNEY, Australia–A social media campaign themed #switchnotbitch has been launched in this country by the Business Council of Co-operatives and Mutuals, which includes credit unions.
The goal is to urge consumers to be proactive about their choices in financial institutions without waiting for new regulations from a banking royal commission or banking tribunal related to what in the U.S. is known as secondary capital.
Currently, in Australia, mutuals are constrained by the Corporations Act from raising investment capital without risking the loss of their not-for-profit co-operative status.
Proponents have been calling for a "modest" change to the Act that would allow mutuals to issue investment capital without demutualizing and would mirror changes in the United Kingdom and other countries, according to the Australian Financial Review.
The Review reported that Australian mutuals also face stricter capital requirements than their larger rivals and if those requirements were made the same, KPMG has estimated mutuals could increase their loans by $25 billion to generate extra profits of $375 million. That would represent a 25% increase in mutuals' size and a 60% increase in profitability.
KPMG's just-released Mutual Industry Review found Australian mutuals' balance sheet assets grew 7.8% last financial year, compared with only 5% for the overall banking industry, the Australian Financial Review reported.
Melina Morrison, CEO of the Business Council of Co-operatives and Mutuals, said if regulations and legislation were reformed so that credit unions, mutual banks and building societies could get better access to capital, it would mean increased competition in the banking sector and give consumers more choice.
"Consumers need to understand there are alternatives to the traditional banking sector which put people and community before profit," she said. "What we often don't hear is the idea that Australians can take matters into their own hands and switch to an ethical provider that reinvests profits into its members and community."