Mutual deposit-taking entities want the prudential regulator to receive a makeover "to increase the priority given to diversity, plurality and competition."The Customer Owned Banking Association, in its submission to the Financial System Inquiry, called for "an end to the Big Four banks' 'age of entitlement'."Rather than list the twists to rules that APRA could make in its members' favour, COBA has considered the issue of how APRA's brief from Parliament might change."When the Big Four banks have an implicit government guarantee it's a false claim that the regulatory environment is based on a single set of rules for a level playing field," COBA said, in an echo of the submission of regional banks."The current regulatory framework has failed to provide competitive neutrality. "Strong action is needed to rectify the implicit Government guarantee that provides the major banks with a large and unacceptable free subsidy on their funding costs.""Prudential regulatory settings on capital, liquidity, marketing and levies artificially tilt the playing field in favour of the largest Authorised Deposit-taking Institutions," COBA said.The association also wants reform to the company tax and dividend imputation system, "which fails to accommodate the customer- owned model."