History of Credit Unions in New Zealand

The New Zealand Association of Credit Unions came into existence in 1961 as the New Zealand Credit Union League. In 1989 we became the New Zealand Association of Credit Unions. NZACU is owned by 21 credit unions, and along with our Associate Members, today we represent over 209,000 New Zealanders, with total assets of $1.2 billion.

Savings and credit societies have been in existence in New Zealand for over 120 years. A number of small independent Credit Unions were also established from the turn of the century, but their size and influence was limited.

In the 1950s, Father Marion Ganey, who had been active in promoting credit unions in the South Pacific, met with Tom Mitchell, a Catholic layman of Hamilton and Father H. Boyd of Matata. Both were so impressed with his ideas that as a result two sister parish credit unions were established: St Joseph's (Matata) Credit Union in the Bay of Plenty, and St Mary's Parish Credit Union in Hamilton.

In 1959 Colin Smith, a Hamilton chartered accountant, was elected treasurer-manager of St Mary's Parish Credit Union. In 1961, Father Ganey was brought to this country for a seminar where he talked about the importance of a united Credit Union Movement. Colin Smith set about organising the New Zealand Credit Union League that formally changed its name to New Zealand Association of Credit Unions (NZACU) in 1989. Trevor Barber was the League’s first President and Colin Smith the first secretary.

In 1964 the League had nine Member credit unions. Colin Smith held the position of Managing Director until his death in 1986. He travelled around New Zealand, promoting parish and industrial-employee credit unions. He also travelled overseas in order to learn more about credit unions in other countries, and in 1967 set up direct links with CUNA International (now known as the World Council of Credit Unions).

By the early 1980s New Zealand had several hundred credit unions. As the movement matured, the smaller of these began to amalgamate by merger or transfer of engagements, a process that is ongoing today. However, despite its continued growth and development, the Movement remains true to its operating principles of democracy and cooperation and its motto of “People Helping People”.

Membership in a credit union is has always been open to all New Zealanders and from December 2006, Charities and Incorporated Societies have also been able to become members due to a legislative amendment. Credit unions operate within an accepted ‘common bond of association’ or ‘membership rules’, which can include combinations of occupations, localities, employers or organisations.

Another legislative change occurred in 2000 which required credit unions to operate within a Trust Deed regime, a requirement of the Securities Act 1978. This change meant that credit unions are now scrutinised by an independent prudential supervisor and their members’ deposits are secured by a first ranking registered Trust Deed, providing financial comfort to their members. Yet another layer of comfort was introduced in 2008 with the assent of the Reserve Bank of New Zealand Amendment Act 2008. This legislation required all deposit takers, which includes credit unions, to be regulated by the Reserve Bank of New Zealand.

NZACU has historically harnessed the collective strength of credit unions and today also incorporates other mutual financial cooperatives, such as building societies. We work for the benefit of the mutual financial sector as a whole by providing our Member organisations with value added services which contribute to the financial success and economic well being of their members'.