Regional credit union reports little increase in mortgage stress

Not all bad news for local mortgagees

With over 55,000 members and 21 branches between Port Macquarie and Bundall on the Gold Coast, BCU is one of the largest regional credit unions in Australia and operates in areas with some of the lowest per capita incomes in New South Wales.

According to Ray Battle, BCU’s CEO, there has been no significant increase in mortgage defaults despite the Reserve Bank’s interest rate increases over the past few years.

'In fact, our lending is up. In the last quarter, BCU posted an impressive 4.5% increase in
loans, annualised as a growth of around 12%,’ said Mr Battle.

In addition, BCU’s standard variable interest rate is one of the lowest in Australia, according to
recent figures released by Infochoice* and as reported in the national press.

How does BCU manage to perform so well and contrary to present market trends to the benefit of locals?

For Ray Battle, BCU’s success rests with its responsible lending policies and community ownership. ‘As a community credit union, we are a mutual acting in the interests of our members. We do not have external shareholders seeking ever-increasing dividend returns and profits. We are owned by everyone who does their banking with us –

they just pay a one-off redeemable preference share of $10. Also responsible lending isn’t just an idle policy; it makes good economic sense and everyone benefits.’

‘At BCU we take our responsibility to our members very seriously and we always have – after all they are also our owners.’

BCU’s responsible lending policies ensure that members are offered loans they can afford to repay with contingency for interest rate rises and living expenses. The range of loan features also means that borrowers are matched with a loan appropriate to their circumstances. Good follow-up from BCU’s relationship managers means that any problems meeting payments are solved rather than allowed to accumulate until a crisis point is reached. We are there for people throughout the life of the loan should members want to talk to us.

*Comparison of standard variable home loan rates on a loan of $150,000 over 25 years.
Rates current at 1 May 2008.
Source: Infochoice

*The comparison rate is based on a loan of $150,000 over 25 years. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Interest rates are current as at 1/5/08 and are subject to change. Loans available to approved applicants only. Normal lending criteria, terms and conditions apply. Interest rates, fees and charges are payable and are subject to change without notice. Banking products issued by Bananacoast Community Credit Union Ltd ABN 50 087 649 750 AFSL no. 241077. 08428/0508

For more information, contact:
Gillian French, General Manager, Marketing on 0429 623 002