Lesley Burvill - Community First Credit Union
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Transcript of Lesley Burvill - Community First Credit Union
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Lesley BurvillHead of Risk
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Looking at the approach of
Credit Unions and
Responsible Lending
Exploring the best practice of
leading Credit Unions and their
approach to responsible lending
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About Community First Credit Union…
• Established in 1959, Community First is Sydney’s largest
community based Credit Union
• $940 million in assets under management.
• 55,000 Members.
• Staff challenging stereotypes and offering standards of
service superior than our competitors.
• 15 Financial Services Stores in locations stretching from
Newcastle to Campbelltown and now the Northern Beaches
and growing every year.
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About Community First Credit Union
Continued
Members enjoy a full retail product range:
• on-call and Term Deposits (up to 3 years)
• Credit cards, Personal loans (including Green loans),
Home loans (P and I or I only), small business loans
• Access accounts and cards, internet and mobile
banking, self help and staff assisted service options.
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Who is Community First?: Our Brands
Powered by Community First Credit Union Limited ABN 80 087 649 938
Mission:
“…help members achieve their financial goals by building relationships for mutual benefit.
Community First uses three brands
in order to promote different value
propositions to two very different
market segments.
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RG 209.32Reasonable inquiries about a consumer’s financial situation will
generally include:
• the consumer’s current amount and source of income or benefits
(this would include the nature and length of their employment—for
example, full-time, part-time, casual or self-employed—and whether
all or part of the consumer’s income is sourced from payments
under the Social Security Act 1991);
• the extent of the consumer’s fixed expenses (such as rent,
repayment of existing debts, child support and recurring expenses
such as insurance); and
• the consumer’s variable living expenses (such as food and utilities)
and drivers of variable expenses, such as dependants and any
particular or unusual circumstances.
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5C’s of Credit
• Conditions
• Character
• Capacity
• Capital
• Collateral
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Requirements and Objectives
• Type of finance
• Primary purpose
• Features
• Flexibility
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Example Mr and Mrs Smith
• $30 000 for a caravan
• Repayments less than $500 per month
• Offered security
• Not Unsuitable
• Our Product offering (some alternatives)
• Unconscionable?
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Loan type Loan amount $ Monthly Repayment (rounded)
Term in years Total interest charge (rounded)
Personal Loan
30 000 690 5 11 400
Mortgage top up
30 000 185 26 27020
Mortgage split
30 000 490 6 5390
Mortgage split
30 000 450 7 6330
3 yr Fixed Mortgage Split
30000 460 pm for 3 years followed by 490 for 3 years
6 5460
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Overdraft versus Credit Card
• Interest rates
• Offset accounts
• Self discipline
• Needs analysis
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Debt consolidation
• True debt consolidation rare at Community First
• Small credit card maximum limits compared to
the majors
• Personal service - high touch model
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This can be grouped into the following;
Fixed Expenses
Rent/Board
Child Support
Insurance
Repayment of Existing Debts
Variable Expenses
Entertainment
Food & Utilities
Dependants
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LIXI categories of Living Expenses
• Basic Housing & Property Expenses (Inc. Utilities)
• Groceries
• Communications
• Recreation & Entertainment
• Transport
• Insurance
• Child care and Education
• Clothing and personal care
• Other
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Any Questions?