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Australian Financial Mutuals

Financial mutuals are self-help organisations that generally engage in deposit taking and lending to their members. They primarily provide financial services to the consumer finance and housing markets.

Australian financial mutuals are subject to the same rules, regulations and legal standards as banks. They are Authorised Deposit-Taking Institutions regulated under the Banking Act 1959 by the Australian Prudential Regulation Authority (APRA) and are incorporated under the federal Corporations Act 2001. (Non financial co-operatives are incorporated under state co-operatives legislation.)

While today's financial mutuals offer similiar services, their original purpose differed markedly. Building societies first appeared in Australia in the 1840's, and until recent times, where primarily small regional home lenders. Credit unions appeared after World War 2 offering consumer banking services.

Since financial deregulation in the 1980's, the number of financial mutuals in Australia has declined, either through mergers with each other or demutualising and converting to a bank.

Today, there are over 100 financial mutuals in Australia with assets totalling $75 billion serving over 4.5 million people.


To promote competition in the Australian banking system, the federal Labor government in 2010 introduced reforms allowing large credit unions and building societies to use the term 'bank' in their name. Market research indicates that 'bank' is associated with financial security, and the reform will promote financial mutuals as a secure alternative to investor-owned banks.

There are now ten financial mutuals which have received approval to use the term 'bank' in their name.

Further information:   Customer Owned Banking Association


Building societies offer a range of financial services to the housing finance market. They operate in much the same manner as banks in that their members enjoy integrated financial services such as home loans, saving accounts, cheque accounts, credit card access and financial planning and investment services.

Building societies have their roots in the self-help movement which evolved in England towards the end of 18th century. They first appeared in Australia in the late 1840's and for the next 100 years, were relatively small regional financial institutions. From 1950 - 1970, the high demand for home ownership saw a rapid expansion of the number of building societies, peaking at 178 in 1975.

Since the deregulation of the banking industry in the 1980's, many building societies converted to banks or merged. At 1 March 2012, there were 9 building societies registered with APRA with assets totalling $20 billion serving more than one million customers.

Further information:   Customer Owned Banking Association


A credit union is a savings and loan co-operative consisting of a group of people who have agreed to help each other by regularly saving together and lending these savings to one another at the lowest possible rate of interest. Credit union members are not motivated to make profits, but by the desire to improve the financial well-being of themselves and fellow members.

At 1 March 2012, there were 94 credit unions registered with APRA and together they held over $50 billion in assets providing community banking services to more than 3.5 million Australians.

Further information:   Customer Owned Banking Association

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