Defcredit – guaranteed, safe, and secure
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The Prime Minister announced on 12 October 2008 that the Government would guarantee all deposits held in credit unions, building societies and banks in Australia. This guarantee will apply to Defcredit as an Approved Deposit taking Institution (ADI) under the Banking Act.
Since this announcement further clarification of the guarantee has been announced, with the guarantee being free up to a threshold of $1 million, with effect from 28 November, 2008. Deposits above this amount will be able to be covered by the guarantee in return for a fee, payable by the ADI. This threshold applies to the total amount of funds held by a depositor in all deposit accounts with that ADI.
As a credit union we are reviewed and subject to the same strict, legally-enforceable prudential standards by the Australian Prudential Regulation Authority (APRA) as banks, building societies and other credit unions. Defcredit provides APRA with comprehensive quarterly reports as well as weekly updates. APRA conducts extensive audit reviews and Defcredit meets regularly with APRA.
Defcredit is also a member of the Credit Union Financial Support Scheme (CUFSS), an industry support scheme that provides deposit protection specifically for credit union members. CUFSS is certified by APRA. Defcredit is also affiliated with Credit Union Services Corporation of Australia (CUSCAL), which exists to provide services and support to credit unions and building societies in Australia.
Defcredit has no direct exposure to overseas institutions and is managed in a prudential manner and continues to operate and maintain both capital and liquidity well above the tight guidelines policed by APRA.
Defcredit does not trade in financial investments, shares, commodities, debentures nor offer loans of guarantee facilities to corporations. Defcredit’s investments are limited to Australian banks and financial institutions with a rating of AA or higher. We offer mortgages in the prime credit market and are not lenders in the sub-prime market. The majority of our personal and home loans are held by serving ADF members.
Overall, both the management and the Board are more than confident that Defcredit’s positioning of the balance sheet is very solid and that it will enable Defcredit to operate through the current market conditions.
Sincerely
Jon Linehan
Chief Executive Officer
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> View the official press release from the Prime Minister
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> View a fact sheet on the Government deposit guarantee
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