Mutuals boast higher regulation standards

Credit unions and building societies are ahead of the pack when it comes to responsible lending practices, according to the industry body Abacus.

While consumer credit legislation was introduced into the lower house last week, certain parts of the legislation will not take effect until January 2011 exposing some consumers to risk, says Abacus CEO Louise Petschler.

"Members of credit unions and mutual building societies, however, can breathe easy because they are protected by the responsible lending principles in the new Mutual Banking Code of Practice," Petschler said.

Abacus introduced the code on 1 July.

"We would urge consumers to ask whether their lender is committed to responsible, fair and ethical lending practices," Petschler said.
 
"The mutual banking sector will be imposing self-regulatory initiatives to ensure that all members lend responsibly and that all contract terms, including fees and charges, will be fair and reasonable."

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