LEONARD COLQUHOUN, MARGARET STUART-MACKENZIE
We have just received, as members of MyState Financial, a 240-page Information Booklet, the size of a small town’s telephone directory, which urges us to vote “Yes” to the merger of MyState Financial and Tasmanian Perpetual Trustees, and to the demutualisation of our credit union. Most of these 240 pages seem to be expressed in the kind of high finance lingo-cum-graphics which dedicated Gordon Gekkos might half-understand, but which acts as a barrier to ordinary people going about their daily lives and regular business.

Why do we smell a rat? Why is our normal healthy scepticism in danger of deteriorating into bitter cynicism.

 

We are reminded of mobile phone contracts with their bamboozling detail aimed, it seems, at forcing contract agreement through exhaustion and mental torture: “Yes, that’ll be $5387.36 for last month. What’s that – you didn’t read the fine print on page 145? Yes, I know it is in 4-point light grey italic, but . . .”

When taken over as a ‘partner’ by one of the Big Four, every small bank we ever belonged to made the same promises about continued service and ongoing concern for our best interests. None survived, and needless to say, neither did any of these promises.

One of us, who was first a customer of Commercial Bank of Australia, joined the Knox Premier Building Society to avoid the clutches of Westpac, but that just delayed the seemingly inevitable. Knox was taken over by the Challenge Bank, which was then taken over / became the Bank of Melbourne, only to succumb in 1997 to being ‘acquired’ by Westpac to benefit from its good customer relations, but instead dragged the standard down to theirs. By 2006, both the Bank of Melbourne, and its attitude to its once-happy customers, were history.
 
Service became worse with every takeover.

This MyState-Trustees merger is not the same as previous mergers which first united the Tasmanian Teachers CU with the Police & Nurses CU as the Connect CU, and later united the Connect and Island State CUs. These were accomplished without demutualisation, although there was a strong push for it at the time.
 
Members, of all those 240 pages of ‘information’, it looks as if the only sections to pay close attention to are “3.3 Possible disadvantages” (pp 30-31), and PKF’s 12.2.2 “Disadvantages” (pp 211-212)

3.3 (a) states that “you will no longer hold a Member Share with mutual rights” with one member – one vote, but “your rights . . . will be dependent on the number of MSF Ltd shares you hold”: as even the most financially illiterate know, some shareholders are much more equal than others.

3.3 (b) tells it bluntly that “you will cease to hold a direct interest in MSF”. We will, we are told, now have an indirect interest as shareholders – and we all know how much control Mum and Dad shareholders have over those director payments-cum-bonuses for failure we’ve been disgusted by.

The PKF “Independent Experts’ Report” advises in section 12.2.2 that as “a mutual, MSF currently operates for the sole benefit of its members who are also customers” and that implementing this merger and demutualisation “may create divergent interests between maximising profits . . .and maximising benefits provided to customers”.

There seems to be little in the other 236 pages to banish the suspicion that we are being gulled into committing membership suicide, and into initiating an inevitable decline in standards of customer service. How much consolation will it be, after standing in line for 45 minutes at a ‘rationalised’ branch under ‘restructured’ administration, or after listening uncomprehendingly to three or four foreign accents at an overseas call centre, or when viewing the latest additional charges and fees on a monthly statement, to recall “We voted for this”.

Those who want the sorts of things outlined in the so-called information booklet have plenty of those sorts of institutions to transfer to – they can even get in early and rack right now off to become Westpac customers (or whatever cutesy term is in use for them at the moment).
 
Vote “No” to losing your credit union and your membership status.

Vote “No” to our mutual interests being wiped out by those of ‘shareholders’ and directors.

Leonard Colquhoun (member since early 1980s)
Margaret Stuart-Mackenzie (member since 2003)