New Zealand Credit Unions Must Deny They're Banks

Auckland, New Zealand — Credit unions in New Zealand have six months, as of August, to be in compliance with a new regulation and adapt their advertising material to state: “We are not a registered bank” or variations of that phrase. The 43 credit unions in New Zealand consider the wording a positive step and they’re complying willingly. The new regulation came down from the Reserve Bank of New Zealand. The regulation “imposes restrictions on words bank or banking by non-bank financial institutions to prevent the public from being mislead or deceived into believing that these were registered banks,” PR and Communications Manager of the New Zealand Association of Credit Unions (NZACU) Vicky Mackenzie said. Many New Zealand non-banking institutions were lending money at loan shark rates. Credit Unions in New Zealand had been using the tagline “Banking where you belongr”, Mackenzie said. Credit unions discussed three possibilities for expanding the statement: 1. We’re a registered Credit Union – not a registered bank. (i.e. we’re not a bank but we are a legal and credible entity); 2. Proudly owned by the people who bank here – not a registered bank. (i.e. point of difference from the banks – member owned); or 3. Credit Union ____ is not a registered bank, we’re banking where you belong. (i.e. reaffirming a sense of belonging) The first two statements in a phone survey done by Mackenzie have proved the most popular. Credit unions in New Zealand are already required to state: “Credit union deposits are shares secured by a first-ranking registered Trust Deed” and “A current investment statement can be obtained from your Credit Union.” The credit unions had to pass certain tests to earn the registered Trust Deed.