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An important opportunity to shape the future of your Credit Union
Your Directors unanimously support this resolution and encourage
Members to vote in favour
JULY 2012
Chairman’s MessageThis information booklet is provided to you, our Members, to help you understand the proposal for your Credit Union to change its name to ‘Police Bank Ltd’ (trading as Police Bank).
The Board of Directors, Management and Staff of The Police Department Employees’ Credit Union Limited (PCU) recommend Members approve a change of name to Police Bank.
This proposal derives from the Government’s Competitive and Sustainable Banking System reforms and opens up a range of new opportunities.
A name change to Police Bank will potentially benefit both the organisation and Members now and into the future through more competitive services, expanded choice and better all round value and service. Importantly we will remain a Member-owned and controlled financial institution.
The Board and I unanimously recommend this name change. We would like your support to become Police Bank Ltd and encourage you to vote in favour of this proposal either by proxy or at the General Meeting on 5 September 2012. We will be sending the Notice of Meeting and voting papers early August 2012.
In summary Police Bank will provide the best of both worlds - the strength, market standing and greater opportunities available as a bank while retaining the same personal service and attention that Members value so greatly.
Our future is in your hands
Regards,
Ken Moroney, AO, APM Chairman.
Contents
Why do we want to change our name?
What benefits should come from changing our name to Police Bank?
Why are we recommending a name change to Police Bank now?
Why did we choose the name ‘Police Bank’?
What is different about a Member-owned, Member-focussed bank?
Will Police Bank offer greater security to Members?
What will change if we move to the Police Bank name?
Will a name change to Police Bank mean we end up acting like a big bank?
Have other Credit Unions or Building Societies taken up this opportunity?
Will a change to Police Bank cost a lot of money and waste resources?
Will fees and charges need to increase if we change to Police Bank?
Will a name change affect access to accounts and services?
What is involved in changing our name to Police Bank?
Your views are important
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Why do we want to change our name?
Providing you and your family with better interest rates, maintaining lower fees, a personal caring service and a real value advantage has and will always remain our priority.
In today’s very competitive world we need to secure the best value funding and services from a range of different sources to ensure you always have access to better banking, saving, investment and loan choices.
A name change to Police Bank will potentially enable us to source these services on behalf of Members from an extended range of professional, wholesale and institutional markets, many of which are typically only available to banks.
For example, we have difficulty getting lower cost loan funding from many local government, superannuation funds and not-for-profit organisations simply because we are not designated or named a ‘bank’ and because their investment charters preclude investments with Credit Unions.
The Police Bank name will potentially help us maintain competitive services, expanded choices and better all round value and service.
Changing our name to Police Bank is an important next step in our 50 year development, helping us provide even better value and service to Members as a truly Member-owned and Member-focussed financial institution.
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Why do we want to change our name? What benefits should come from changing our name to Police Bank?
A name change to Police Bank will potentially benefit both the organisation and Members now and into the future through more competitive services, expanded choice and better all round value and service.
As a bank we will potentially be able to:
• Gain access to more cost effective funding in wholesale markets and attract deposits from organisations which typically restrict their dealings to only banks, further enhancing the availability of competitive funding for lending to Members;
• Gain maximum advantage from a greater public awareness and understanding of what a bank is (and does) as opposed to Credit Unions. Incorporating the term ‘bank’ in our name will communicate that we provide full banking services and assist us to compete on a more level playing field and gain a greater share of business;
• Attract new Members (and build more valuable relationships with existing Members) as individuals generally perceive banks as safer. This opportunity will help us grow, achieve better efficiencies and provide better all round value and service for our Members;
• Strengthen our standing within the broader financial services marketplace to help us source and provide Members with additional investment, lending and convenient banking choices.
Police Bank provides the best of both worlds - the strength, market standing and greater opportunities available as a bank, but the same personal service and attention that Members value so greatly. 3
A name change to Police Bank will potentially provide more competitive services, expanded choice and better all round value and service.
Why are we recommending a name change to Police Bank now?
The opportunity to change our name has come about as part of the Competitive and Sustainable Banking System reforms announced by the Federal Government and Treasury in December 2010.
These reforms were prompted by community concerns in relation to the concentration of financial power in the hands of the major banks and the importance to ‘position smaller lenders as competitive alternatives to the big banks’.
The reforms are extensive and include:
• Positioning Member-owned, Member-focussed financial mutuals such as PCU as an important part of a 5th pillar in the Australian banking system;
• Providing an opportunity for larger financial mutuals such as PCU (with more than $50m in capital) to apply to adopt bank branding, e.g. Police Bank;
• The funding by the Government of a bank on a better deal advertising campaign to promote financial mutuals such as PCU over the big 4 banks;
• Extension of the Financial Claims Scheme (i.e. the Government guarantee on deposits); and
• The opening up of a range of new wholesale funding and bond markets to enable us to gain easier and more cost effective access to these and other loan and funding opportunities.
Your Board of Directors has considered the matter for 12 months. During this period the views and ideas of Members, independent experts and other Credit Unions have been researched and examined carefully.
On the basis of these considerations, the Board, Management and Staff of PCU strongly support and recommend that you join with us to vote ‘YES’ for a name change to Police Bank Ltd.
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Why did we choose the name ‘Police Bank’?
We will continue to reinvest our profits back into our systems, people and products in order to provide you with an even better banking experience.
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The recommended name of Police Bank Ltd gives prominence to our police heritage and our point of difference as a Member-owned and Member-focussed financial institution.
If approved our registered company name will be ‘Police Bank Ltd’ and our trading name will be Police Bank.
The Police Bank Ltd name has been reserved with ASIC, subject to Members approving the name change and the Australian Prudential Regulation Authority (APRA) subsequent approval of our S66 Banking Act consent application.
The proposed name ‘Police Bank’ describes who we are, what makes us different and what we stand for - better banking value and service for you, your family and your future.
What is different about a Member-owned, Member-focussed bank?
Credit Unions, Building Societies and Banks are all ‘Authorised Deposit Taking Institutions’ for the purposes of the Banking Act and for the purposes of prudential regulation and supervision by APRA.
One major difference to the big 4 banks is that Credit Unions, most Building Societies and all mutual structured banks are owned by and for the exclusive benefit of their Members.
This difference offers many big advantages, the most obvious being the more personal and genuinely caring service (because Member’s interests come first).
The difference with Police Bank is that we will have all the strength and services of a major bank but with the service and value that can only come from being Member-owned and Member-focussed.
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As Police Bank our Members’ rights will not change.
PCU has always been Member owned and focussed, and this will not change under Police Bank.
Will Police Bank offer greater security to Members?
PCU already offers Members the same protection as other authorised deposit taking institutions under the Banking Act, APRA Prudential Standards and the Financial Claims Scheme (i.e. the Government guarantee on deposits).
However unlike most big banks, PCU limits its dealings to Members. It operates only in Australia and in relation to very low risk saving, investment and household lending. PCU has no international exposures or exposures to off-shore banking systems or to currency, corporate lending or investment risks.
It also needs to be remembered that PCU is one of a small number of Credit Unions and Building Societies that have the opportunity to apply to APRA to change due to our strong capital and prudential position. A change to Police Bank potentially lifts our standing in the market and helps open up new opportunities for Members.
A name change to Police Bank Ltd will continue to protect Members’ interests, maintain our strong prudential position and potentially lift our standing in the market for the future benefit of all.
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What will change if we move to the Police Bank name?
If approved by Members our name will change to Police Bank Ltd, (trading as Police Bank), with this change also being reflected in our Constitution.
In all other regards, our structure and operation will not change:
• Our official bond of association and our focus on the needs of the people of the NSW Police Force, Australian Federal Police and Australian Customs Service and their families will remain and not change;
• We will remain a mutual financial institution (i.e. 100% Member-owned and Member-focussed), where major decisions are made by Members on a one Member, one vote basis. Profits will continue to come back to you through improved products and services, maintaining lower fees and charges, competitive and innovative lending and deposit products;
• There will be no change to your accounts or day to day banking arrangements; and
• We will continue to uphold the highest of professional and ethical standards, while our dedicated staff will continue to provide the same outstanding personal service that sets us apart from all others.
Police Bank will provide the best of both worlds - the strength, market standing and greater opportunities available as a bank, but the same personal service and attention that Members value so greatly.
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Continuing to offer competitive and innovative lending and deposit products to our Members is our priority and will remain.
Will a name change to Police Bank mean we end up acting like a big bank?
PCU has always provided banking services. We are regulated under the Banking Act and have to comply with the same Prudential Standards as any other regulated authorised deposit taking institution. Until now, we just couldn’t call ourselves a ‘bank’.
However, it is not simply the name that makes the difference, but rather because we are Member-owned and Member-focussed.
Whereas most other banks are controlled by a small number of large institutional investors and shareholders, Police Bank will still be owned by and for the benefit of its Members. This is the structure that makes the difference.
It means a more caring personal service because you’re an owner. It also means better all round value because after-tax profits support Members in terms of maintaining competitive interest rates, lower fees and an expanding range of Member services and facilities.
Police Bank will always be different. It will be a Member-controlled and Member-focussed financial institution, operating for the exclusive benefit of current and future generations of Members and their families.
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Have other Credit Unions or Building Societies taken up this opportunity?
Will a change to Police Bank cost a lot of money and waste resources?
The opportunity to change to a bank has been taken up by a small number of Credit Unions and a Building Society.
To date the following institutions have changed:• Mecu - changed to bankmecu (September 2011)• Queensland Teachers Credit Union - changed to QT Mutual Bank (October
2011)• Heritage Building Society - changed to Heritage Bank (December 2011)• Defence Force Credit Union - changed to Defence Bank (February 2012)• Victoria Teachers Credit Union - changed to Victoria Teachers Mutual
Bank (March 2012)• Teachers Credit Union - changed to Teachers Mutual Bank (April 2012)
In each case, the proposed name change was strongly supported and approved by Members.
The PCU Board carefully assessed the experiences of other Credit Unions before making its recommendation. Our Directors are satisfied that a change to Police Bank will benefit Members now and into the future.
Of course there will be some initial and other associated costs involved in changing our name, but in overall terms these will be minor and will not impact the value or services available to Members.
The change, if approved, will be managed to minimise cost and disruption.
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Will fees and charges need to increase if we change to Police Bank?
Will a name change affect access to accounts and services?
No additional fees and charges will be incurred due to the proposed name change.
We will continue to offer opportunities for Members to avoid fees and charges as is the case now. We will maintain our Member Rewards Program providing Members with bonus fee free ATM and EFTPOS transactions (as well as qualify for fee rebates), personal cheques and external electronic periodical payments.
If successful, a change to Police Bank should help open up opportunities to introduce new banking services.
No, all we are recommending is a name change.
Everything else will remain the same and you will not be inconvenienced in any way. There will be no changes to your membership structure or day to day banking arrangements that you currently have in place with us.
You will still have access to the same accounts and services, the same friendly staff, the same benefits and all the same rights and privileges as you currently enjoy as a Member.
A change to Police Bank will not inconvenience you in any way, only provide benefits. 11
There will be no change to your accounts or day to day banking arrangements.
What is involved in changing our name to Police Bank?
Ultimately the recommended name change can only happen if 75% of Members who participate in the vote, vote in favour of the change. Voting can occur either by proxy up until 5pm on 3 September 2012 or in person at our General Meeting on 5 September 2012.
Your Board of Directors has been considering the opportunity for 12 months. In that time the Board has commissioned research to listen to initial Member views, sought expert advice and consulted those Credit Unions that have already made the change.
The Board has also consulted Management and Staff and have sought their views and support.
On the basis of these considerations, the Board, Management and Staff of PCU strongly support and recommend that you join with us to vote ‘YES’ for a name change to Police Bank Ltd.
However we strongly believe that Members should also have the opportunity to find out more about the proposal, to discuss the opportunity and to exchange ideas and views.
If we are to change, it is important that the proposal is supported by the overwhelming majority of Members.
The following Member Information and Consultation programme is planned:
1. Outline of the proposal and recommendation (this Member Information Booklet)
2. Enquiry hotline - now operating on 131 728, 8:00am to 6:00pm, Mondays-Fridays
3. Visit www.pcu.com.au
4. Online at facebook.com/NSWPCU and twitter.com/NSWPCU
5. Notice of General Meeting and voting papers - to be sent to all Members early August 2012
6. General Meeting - 5 September 2012 at the Masonic Centre - Composite Room, 66 Goulburn Street, Sydney
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Your views are important Over the coming weeks your Directors, Management and Staff want to consult with you and fellow Members in relation to the recommended name change to Police Bank.
You are encouraged and we would greatly welcome your comments, views and ideas.
If you have the opportunity, your attendance at any of the Member Information and Consultation meetings (see above) would also be greatly appreciated.
Alternatively, you may like to contact us and offer your comments by phone, email, website, Facebook, Twitter or mail (see back page).
Above all, the Board, Management and Staff of PCU would greatly value your decision to join with us to vote ‘YES’ for a name change to Police Bank Ltd. 13
7. Member Information and Consultation Meetings - phone Amy Barry on 9287 0802 or email [email protected] to make a reservation:
Location Time and Date Venue
Campbelltown 16th July 2012, 6:00pm Rydges Campbelltown – Warby Room 15 Old Menangle Road, Campbelltown
Sydney 16th July 2012, 6:00pm Sydney Masonic Centre – Composite Room 66 Goulburn Street, Sydney
Parramatta 17th July 2012, 6:00pm Park Royal – James Ruse Room30 Phillip Street, Parramatta
Penrith 17th July 2012, 6:00pm Penrith Panthers Leagues Club – Hunter Room123 Mulgoa Road, Penrith
Tamworth 18th July 2012, 6:00pm Quality Hotel Powerhouse Tamworth – Monty’s Room248A Armidale Road, Tamworth
Canberra 19th July 2012, 6:00pm Rydges Lakeside Canberra – Lake Hakone Room1 London Circuit, Canberra
Newcastle 24th July 2012, 6:00pm Quality Hotel Noah’s on the Beach – Pacific West RoomCnr Shortland Esplanade and Zaara Street, Newcastle
Wollongong 24th July 2012, 6:00pm Novotel Wollongong Northbeach - Pacific Room 2-14 Cliff Road, Wollongong
Dubbo 25th July 2012, 6:00pm Carlton House – Harrison Room212 Darling Street, Dubbo
If approved by Members the last step will be to formally apply to the Australian Prudential Regulation Authority for consent to the use of the words or expressions ‘bank’, ‘banker’ and ‘banking’ under S66 of the Banking Act.
The Police Department Employees’ Credit Union Limited. ABN 95 087 650 799. AFSL/Australian Credit Licence No. 240018. Level 27, 1 Market Street, Sydney NSW 2000 | www.pcu.com.au | [email protected] | ph. 131 728.
If you have questions or would like more information please contact us:
Address correspondence:Chief Executive Officer
Police Credit Union Reply Paid 63593
SYDNEY NSW 2000.
131 728 [email protected] facebook.com/NSWPCU twitter.com/NSWPCU www.pcu.com.au
