As part of the new Financial Claims Scheme (FCS), on the afternoon of 12 October 2008 the Prime Minister Mr Kevin Rudd announced a three year guarantee for all deposits held with Credit Unions, Australian Banks, and Building Societies. This guarantee will operate for a period of three years.

Recent weeks have seen numerous media reports about the difficulties of various financial institutions resulting from the US sub-prime mortgage crisis. Your Board and Management feel this is a good time to address the overall state of Phoenix Credit Union Limited (PCU) and Credit Unions in general.

Things are unusual in the financial markets right now, but rest assured – Phoenix Credit Union Limited (PCU) isn’t going anywhere. Your Board and Management would like to communicate PCU’s strong financial position and take this opportunity to assure our member-owners that PCU remains a safe and secure financial institution worthy of your confidence. The foundation of our success has been our sound business practices and our commitment to protecting our member-owners’ assets.

PCU and other Credit Unions meet the same strict, legally enforceable standards as banks under the Banking Act regulated by the Australian Prudential Regulation Authority (APRA). Credit Unions are prudent and responsible lenders. We have no exposure to the toxic sub-prime loans in the US. PCU and other Credit Unions have steered clear of the sub-prime mess. Credit Unions have the lowest levels of arrears in the Australian lending market.

PCU and other Credit Unions went into this economic turmoil with very strong balance sheets and will still be in very strong shape when it’s over. Credit unions have the highest level of capital in the banking system: 16.5% on average for credit unions compared to the already high 10.6% of banks.  Please refer to the following fact sheet for further information.

As you respond to concerns about today’s economic future, please remember that PCU and other credit unions are a safe place for your savings. On the face of things, credit unions and banks may look similar. We offer similar services and have similar products. But there is a distinct difference. Banks exist to make profits and pass the money along to their shareholders. Credit unions exist to serve their members through people helping people.

We are committed to continuing to provide superior service while maintaining your trust and confidence.

Learn More

• Government Deposit Guarantee Fact Sheet
• Government Press Release
• Credit Unions Growing from Strength to Strength
• Facts and Figures at a Glance