Trio of Melbourne mutuals unite

Three Victorian credit unions have received the blessing of the Australian Prudential Regulation Authority for their proposed merger and have called special general meetings for later this month so members can consider the proposal.

La Trobe University Credit Union, Melbourne University Credit Union and Pulse Credit Union will need a majority of 75 per cent of members to vote in favour of the proposal for the merger to go ahead.

If the merger does go ahead it will be achieved by two simultaneous transfers: all La Trobe's business will be transferred to Pulse; and all Melbourne's business will be transferred to Pulse. The three institutions would have equal board representation.

Pulse is not making any payments for the transfers of the other two businesses.

The merged entity would have 9500 members and around $80 million of assets. La Trobe has 2000 members, Melbourne has 2300 and Pulse (which is an amalgam of credit unions operating in the Victorian health industry) has 5200 members.

The group has given a commitment that the merged entity will remain a mutually owned business.

The information memorandum issued to members sets out the usual reasons for merging: the rising costs of meeting tougher compliance requirements; the cost-effectiveness of a larger organisation; and the improvement in product and service delivery that a bigger institution can offer.

All three credit unions reported profits for the 2010/11 financial year.

If members support the proposal the merger will be completed on October 1.