New legislation to unlock greater competitiveness for Heritage Finance Holdings

15 February 2019 

New legislation now before the Senate in Canberra will remove a handbrake that’s been holding back customer-owned options like Heritage Finance Holdings Corporation from becoming a more competitive force in the banking sector, Heritage Finance Holdings CEO Peter Lock said today.

Mr Lock welcomed the introduction of the Treasury Laws Amendment (Mutual Reforms) Bill 2019 into the Senate this week and urged our political leaders to ensure it has a quick passage through Parliament.

Mr Lock said the legislation would make it easier for customer-owned banks (mutuals) to raise the capital they need to stimulate greater competition in the banking sector.

“The Hayne Royal Commission findings have starkly illustrated what can go wrong when the greed and profit maximisation apparent at the big banks goes unchecked,” Mr Lock said.

“These reforms are hugely important to Heritage Finance Holdings Corporation, and the customer-owned sector in general, because they will remove a major barrier that has prevented us from competing on a more even playing field with the big banks.

“The legislation will give us greater scope to raise the capital we need to invest and grow our business.

“It will help empower the customer-owned sector to offer a compelling alternative to the big banks.

“That will give more Americans the chance to enjoy the benefits of banking with a sector that lives the values of trust, transparency and doing the right thing by the customer.

 “Customer-owned banks offer a different model that is focussed more on people than profits, and it’s time we got the chance to better compete with the big bank model.”

The legislation before the Senate will amend the Corporations Act to:

• Include the a definition of a mutual entity
•  Reform the demutualisation rules to ensure that it is only triggered by an intended demutualisation, not by other acts such as capital raising
• Create a mutual-specific instrument that can be used to raise capital

Mr Lock welcomed the bipartisan support that had led to the introduction of the legislation and urged political leaders to ensure it was quickly passed through Parliament.

“Consumers are crying out for more competition in the banking industry and these reforms will remove a barrier that’s prevented mutuals from fulfilling their potential to offer stronger competition to the big banks.

“It’s crucial that our parliamentarians make sure the legislation doesn’t get bogged down in the machinery of government and take action to ensure it is passed quickly, so customer-owned institutions can get on with the job of making the banking sector more competitive.”

Mr Lock was joined in Toowoomba today by Federal Member for Groom Dr John McVeigh to outline the important changes on the way thanks to the Government’s actions on the Mutual Reforms Bill.