An important opportunity to shape the future of your credit union. October 2016

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1 An important opportunity to shape the future of your credit union October 2016

2 Message from our Chair This information booklet has been created for our members, to help you understand the proposal for your credit union to change its name to Reliance Bank. We know you will have questions and we hope that this booklet will answer them. If not, feel free to call us on As a member of Reliance Credit Union you play an integral role and the decision for us to become a mutual bank is literally in your hands. The credit union has always been a mutual and that will not change. We will continue to exist for the benefit of our members and remain member-owned. This proposal will give our members the best of both worlds, mutually owned but renamed and known as a Bank. The Board unanimously recommends this name change. Our members will have the opportunity to vote for the name change on Wednesday, 30 November 2016 at our next Annual General Meeting (AGM). If you are unable to attend the AGM, please vote using the proxy form included in this pack. Regards Mick Doleman Chair

3 Contents Why do we want to change our name? 4 Why are we doing this now? 4 Why did we choose the name Reliance Bank? 5 What is the difference between a credit union, a mutual bank and a bank? 6 What will change if we move to the Reliance Bank name? 6 Will a name change to Reliance Bank mean we end up acting like a big bank? 7 Will this affect fees? 7 Will a name change affect access to accounts and services? 7 Have other credit unions or building societies taken up this opportunity? 8 Does this mean we will be demutualising? 9 What is the process of changing our name to become a mutual bank? 9 What would our new name and logo look like? 9 If approved, when will the name change happen? 10 What will happen if it is not approved? 10 We need your support! 10 You are important! 11

4 Why do we want to change our name? As a member-owned organisation our focus has always been our members. The credit union constantly seeks to ensure our members have access to better banking, saving, investment and loan choices. We believe that changing our name to Reliance Bank will potentially enable us to: Stay relevant and current for all members. Industry research has shown us that many consumers perceive credit unions to be old fashioned and only offer limited products and services. Source better services on behalf of members from an extended range of professional, wholesale and institutional markets, many of which are typically only available to banks. Meet the above challenges while still retaining our mutual (member-owned) status, values and principles upon which we were founded. Why are we doing this 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 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 for Australian consumers. The Government announced that they would put more competitive pressure on the big banks by building a new pillar in the banking system based on the combined competitive power of mutual credit unions and building societies. We have decided to change our name now because: We currently meet the eligibility criteria to apply for regulatory approval to use the restricted term bank. The Federal Government is supporting and investing in the promotion of mutual financial institutions as strong and viable banking alternatives to the big banks. The opening up of a range of new wholesale funding and bond markets, enabling us to gain access to these and other loan and funding opportunities. page 4

5 As a larger mutual credit union, we currently have the opportunity to adopt bank branding (e.g. Reliance Bank) but also retain our mutual (member-owned) status. Reliance Credit Union is a division of Maritime, Mining & Power Credit Union Limited (MMPCU). As a shareholder member of Reliance Credit Union, the Board and Management of MMPCU strongly recommend that you vote FOR the proposal at the Annual General Meeting (Wednesday, 30 November 2016) for MMPCU to change its name to Unity Bank. With this change, Reliance Credit Union will also change its name to Reliance Bank. For those who cannot attend, please vote using the proxy form included in this pack. Why did we choose the name Reliance Bank? The word Reliance is a highly recognised name in the communities we serve and support, and one we will continue to promote. The word Bank promotes to existing and future members the fact that we offer more than just savings accounts and personal loans. We offer the full range of financial products and services that individuals and families need. In the public s mind it infers strength and stability. page 5

6 What is the difference between a credit union, a mutual bank and a bank? Credit Unions service communities and/or industry employees and are owned by members. One member share equals one vote on credit union constitutional matters. Not all credit unions provide credit cards, home loans, online savings accounts, foreign exchange etc. to individuals and their families. Many credit unions still offer limited banking services. Credit union surplus is reinvested to support competitive products and services and community programs. Mutual Banks (Reliance Bank) service communities and/or industry employees and are owned by members. One member share equals one vote on mutual bank constitutional matters. Mutual banks provide the standard consumer banking services such as credit cards, personal loans, home loans, online savings accounts, internet and mobile banking etc. Any surplus is reinvested back into the mutual bank to support competitive products and services and community programs. Banks are owned by shareholders who may or may not be customers. Most banks are publicly listed on the stock exchange where individual or institutional investors purchase multiple shares with varying voting numbers and rights attached to the shares. A proportion of bank profits are returned to shareholders as dividends. Banks strive to maintain or increase the value of the bank s share price and return a strong dividend to shareholders. Credit unions, mutual banks and banks are all Australian Authorised Deposit-Taking Institutions and are regulated by the Australian Prudential Regulation Authority (APRA). Reliance Credit Union has always been a mutual and will remain a mutual with one member vote. As Reliance Bank, we will continue to be mutual, member owned and focused. What will change if we move to the Reliance Bank name? If approved by members our name will change to Unity Bank Limited (trading as Reliance Bank). In all other regards, our structure and operation will not change: We will remain a mutual financial institution i.e. 100% member owned. There will be no change to your accounts or day to day banking arrangements. Our constitution will be updated to reflect the new name. page 6

7 Will a name change to Reliance Bank mean we end up acting like a big bank? No. The difference is that Reliance Bank will remain member owned and member focused. Reliance Bank will not be owned by a small number of large institutional investors and shareholders. Reliance Credit Union 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 could not call ourselves a bank. We will remain different to the big banks and will continue to operate for the exclusive benefit of current and future generations of members and their families. Will this affect fees? No. Additional fees and charges will not be incurred as a result of the name change. We will continue to make every effort to provide member value when setting fees and charges. Will a name change affect access to accounts and services? No. 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 and all the same rights and privileges you currently enjoy as a member. A change to Reliance Bank will not inconvenience you, but rather provide more member benefits. page 7

8 Have other credit unions or building societies taken up this opportunity? The opportunity to change to a bank has already been taken up by the following institutions: INSTITUTION CHANGED NAME TO DATE bankmecu Sep-11 mecu Bank Australia (mecu Limited) Aug-15 Queensland Teachers Credit Union QT Mutual Bank Limited Oct-11 Heritage Building Society Heritage Bank Limited Dec-11 Defence Force Credit Union Defence Bank Limited Feb-12 Victoria Teachers Credit Union Victoria Teachers Mutual Bank Mar-12 NSW Teachers Credit Union Teachers Mutual Bank Limited Apr-12 The Police Department Employees Credit Union Police Bank Limited Dec-12 Police & Nurses Credit Society P&N Bank (Police & Nurses Limited) Mar-13 Police Association Credit Co-Operative Community CPS Australia BankVic (Police Financial Service Limited) Beyond Bank Australia (Community CPS Australia Limited) Jun-13 Aug-13 Hume Building Society Hume Bank Limited Jul-14 SGE Credit Union G&C Mutual Bank Limited Dec-14 IMB IMB Bank (IMB Limited) Aug-15 Australian Defence Credit Union Australian Military Bank Limited Dec-15 Qantas Credit Union Qudos Bank (Qudos Mutual Limited) Apr-16 Greater Building Society Greater Bank Limited May-16 page 8

9 The Maritime, Mining & Power Credit Union Board carefully assessed the experiences and learnings of other credit unions before making its recommendation. Our Directors are satisfied that a change to the names Unity Bank and Reliance Bank will benefit our members now and in the future. Does this mean we will be demutualising? No. We will remain member-owned and member focused, this will not change. We have always been a mutual and we will continue to exist for the benefit of our members. What is the process of changing our name to become a mutual bank? To become a mutual bank we need the support of 75% of members who vote, to vote in favour of the resolution. Members will be able to vote for this change either by proxy, up until 3.00pm on 28th November 2016, or in person at our AGM on Wednesday, 30th November All shareholder members over the age of 18 are eligible to vote. The Board of Directors and Management believe your support and endorsement of this move is paramount and we encourage you to vote FOR this change. If approved by members the last step will be to formally apply to the Australian Prudential Regulation Authority (APRA) for consent to the use of the words or expressions bank banker and banking under S66 of the Banking Act. What would our new name and logo look like? While our current tagline you first. always has served us well and will always be a core value for Reliance Credit Union, we would like to update our tagline. We feel the tagline your community. your bank better reflects our extensive commitment and involvement in families and sponsorships in regional areas. page 9

10 If approved, when will the name change happen? Subject to the name change being approved we have requested that it become effective from 1 March What will happen if it is not approved? We are in a strong financial position and we expect this to continue. However, we believe this is our best opportunity to position ourselves for the future. If we do not take advantage of this opportunity and the name change is not approved then Reliance Credit Union will continue to face the same challenges we always have, including: A consumer perception that we are old fashioned and do not offer a full range of banking products and services (e.g. credit cards, home loans, mobile banking etc). Being less competitive in attracting new and younger members. Limited access to cost-effective funding. We need your support! For this change to happen we need the support of 75% of members who vote, to vote in favour of the name change. Members can vote either by proxy or in person at the Annual General Meeting (AGM), which will be held on Wednesday, 30th November The Board of Directors have been considering this opportunity for some time. In that time, the Board has commissioned research to listen to initial member views, sought expert advice and consulted with other mutuals that have already taken up the opportunity to become a mutual bank. The Board has also consulted Management and Staff and have sought their views and support. On the basis of these considerations, the Board and Management of MMPCU strongly recommend that you vote FOR the proposal at the Annual General Meeting (Wednesday, 30 November 2016) for MMPCU to change its name to Unity Bank. With this change, Reliance Credit Union will also change its name to Reliance Bank. page 10

11 You are important! If we are to change, it is important to us that the proposal is supported by the overwhelming majority of our members. The decision to become a mutual bank is literally in your hands as each member has equal voting rights and no one member carries a stronger influence over another. If you would like to know more about this proposal or if you have any questions, please feel free to contact the credit union. The following member information and consultation programme is planned: Outline of the proposal and recommendations (this member information booklet). Member enquiries or questions contact Member updates. Website Via facebook.com/reliancecu Member Information and Consultation meetings. Notice of Annual General Meeting and proxy form included in this pack. The Annual General Meeting, Wednesday, 30 November 2016 at 3.00pm at Ground Floor Training Room, 365 Sussex Street Sydney NSW. In summary, the Board and Management would greatly value your decision to join with us to vote FOR this name change. page 11

12 If you have any questions or would like more information please contact us: Information will be updated on our website Address correspondence: Chief Executive Officer Reliance Credit Union PO BOX K237, Haymarket NSW 1240 Reliance Credit Union is a division of Maritime, Mining & Power Credit Union Limited. ABN AFSL/Australian Credit Licence