‘Open market exposure’ for credit unions

Press, 28 February 1987, Page 41

‘Open market exposure’ for credit unions

PA Hamilton The need for credit unions to retain their noritaxable status was emphasised by an American speaker at the Credit Union League’s silver jubilee conference in Hamilton. The conference Was addressed briefly by the World Council vice-presi-dent, Mr Marvin Cottom, immediately before the Associate Minister of Finance, Mr Caygill, said credit union legislation would be reviewed later this year. Mjr Cottom said credit unions were the only financial organisations to have demonstrated that they were democratically run by their own members to provide a service. Throughout the world, they, had to remain taxfree if this role were to continue with a commitment to co-operative selfhelp. Mr Caygill, in his keynote address, did not mention taxation. But he said a review of the

Friendly Societies and Credit Unions Act would expose credit unions to greater competition with other financial institutions and to a need for “substantial changes in management thinking.” Credit unions would no longer be sheltered from the “rigours of commercial reality” and their managers would have to become aware of their potential competition in their own share of the market With other financial institutions expanding their roles and becoming more competitive in a freer market credit unions would be given legislative ability to expand their own activities.

The impact of this could be significant for small .credit unions with a small, and in many cases declining, deposit base. But in general, credit unions would need to market their services aggressively and become more professional in their attitude to money management