What was CUFSAL?

Ben Woods, Assistant Archivist, Australian Mutuals History

Many people working in mutual banks and credit unions today would know of CUSCAL but what about CUFSAL? CUFSAL is an acronym for Credit Union Financial Services Australia Limited and was created in 1985 by the Australian Federation of Credit Union Leagues (AFCUL).

It was established as a national presence for credit unions in the Australian and international money markets and to improve security for credit union depositors.  According to foundation Managing Director, Reg Elliott, CUFSAL had its origins about 5 years before its official commencement when the ‘central bank’ of the various state credit union associations began to integrate.  

Historically, ‘central banking’ was necessary as credit unions need sufficient economies of scale in order to maintain the financial security of their operations and of course there is legislation overseeing this. When technology improved and legislation became increasingly federalised it made sense to create a national ‘central bank’ for credit unions. Eventually, the various state leagues became centralised in CUSCAL which also became the holding company for CUFSAL.

Greg Stevens was Executive Manager, Central Banking, with CUFSAL for over 10 years, leaving in 1994, (currently Chair of the Australian Credit Union Archives Trust) and wrote the following about CUFSAL for a Masters project in 1991:

CUFSAL is owned by and represents the state associations of NSW, ACT, South Australia (NT via South Australia) and Western Australia. In addition AFCUL has a small shareholding. CUFSAL’s Charter was to enhance the credit union movement by improving liquidity, guaranteeing settlement obligations and providing a treasury management function.

It was established with an innovative capital requirement which required each member state association that invested in the company that at all times it would maintain a debt to equity ratio of 20:1. Under CUFSAL’s Charter, each state association must continually upgrade their capital in accordance with the amount of funds they invest with CUFSAL.

Additionally, credit unions are required under their various statutes, to hold between 7% and 10% of deposits (depending on state legislation) in liquid funds. The majority of these funds are invested with CUFSAL through their state associations.

In 1992, after the implementation of Project Renewal, all CUSCAL’s shareholding credit unions deposited funds directly with CUFSAL.

Part of Greg’s work with CUFSAL involved investing funds in the short term money market and fixed interest markets on behalf of investing associations (he is pictured below on the phones during a hectic trading day). The June 1987 edition of Australian Credit Unions Magazine included a feature on CUFSAL that incorporated a run-down of a typical day in the office for Greg. At one point after making a $5 million deal in securities over the phone, Greg says:

Quick thinking is the name of the game. You’ve got to be accurate – particularly when you’re number crunching. Those figures have to fall on the right side of the cash flow – that is, inflow or outflow of funds – or we’ll find ourselves in the black or the red just when we shouldn’t be.

CUFSAL was also responsible for handling the payments of the credit union movement’s Redicard and Visa payments from 1991 – as well as managing corporate and member chequing and national credit union superannuation funds.

Under the Financial Institutions Scheme, CUSCAL and CUFSAL were registered as Special Service Providers. In early 1994, CUFSAL was managing $2.5 billion in funds including national credit union cash and fixed interest ADFI’s and superannuation funds.

As time went on and credit unions became regulated by the Banking Act and became larger institutions, they didn’t require central banking for liquidity management. Today, CUSCAL provides payment services.

From Australian Credit Unions Magazine, June 1987

A Tribute to Reg Elliott

Reg Elliott brandishing NSWCUL’s “Credit Unions-Getting it Together” multimedia promo-kit in 1983 [AMH Collection]

Ben Woods, Assistant Archivist, Australian Mutuals History

Australian Mutuals History was saddened to learn of the passing of Reginald (Reg) Elliott in February of this year at the age of 87. Reg was a significant figure in the Australian credit union movement, being instrumental in the reforms of Project Renewal and implementing important change in the NSW Credit Union League (NSWCUL) in the late 1970s and early 1980s.

Reg’s obituary in the Sydney Morning Herald reads in part that, “above all, Reg loved his family – they provided him with everything he wanted. Family meant love, humour, small time chaos, bad jokes, challenges, reading recommendations, ethical discussions. And we always knew where Reg stood in those discussions. Always”. It also says that, “Reg was a sailor, a thoughtful reader, a snappy dresser and a dedicated runner and marathoner with his friend Richo”.

Reg was born and schooled in Parkes in the Central West of NSW (home of the famous telescope and the infamous Elvis Presley festival). He left school as soon as legally possible as it wasn’t his cup of tea.

After leaving school he secured a job with the Bank of Australasia in Parkes. The Bank of Australasia is today the ANZ Bank and Reg stayed with them for 27 years. He told Richard Raxworthy in the oral history interview from 1991 that is in our collection that, “my first job was making the ink, we never had adding machines. I even had a job chopping the wood for 8 fires. It was a different era”.

His stay at the Parkes Branch was only 6 months as he moved to Peak Hill, NSW and as he told Raxworthy, “from then I became a company person. I was on the move for the next 27 years”. His work with ANZ required regular moves around Australia’s capital cities and regional centres.

The work at what was to become ANZ was highly fulfilling to Reg. He told Raxworthy that, “I always enjoyed my career with the bank. I was certainly not a wounded soldier when I left. I thought it was a good job, I was successful at it and I thought very strongly that banks had a very positive role”.

So, why did he leave a company and an industry he was very fond of? He told Raxworthy that, “The rest of the family finally got sick of being nomads and since I’d been a part of building the system designed to create the new ANZ, I had a choice to make, I either had to get off the train in terms of mobility or secede from my ambitions”.

Reg was approached by employment agency Spencer Stuart on behalf of NSWCUL in the late 1970s. He was reluctant to accept the offer of the job with them. While he consented to his family’s wishes regarding leaving his role with ANZ it took him some time to agree to join NSWCUL. In his own words he said:

I think I would have been the most reluctant of employees because mentally I couldn’t contemplate making a move at that time particularly when I was already among the senior executives of ANZ to go to what I regarded as an infant or maybe even a maverick industry. So it was quite a sizable decision and they kept up the pressure on me for some three months and finally a good friend of mine suggested that I should at least come over to Sydney and see these people … I was very impressed with the people I met. They seemed to know what they wanted. They impressed me as having a sense of direction and a sense of determination that they’d be people worth working for.

He became NSWCUL General Manager/CEO in 1978. He joined the Australian Federation of Credit Union Leagues (AFCUL) in 1985 as CEO and oversaw the reforms of Project Renewal which included the development of CUSCAL and their engagement with new information technology and national regulation.

In 1998 CUSCAL presented Reg with a Distinguished Service Award. The awards were presented annually to “honour those individuals who have made tremendous contributions to the success of credit unions”. In CUSCAL’s tribute to Reg they listed the significant goals that CUSCAL and its predecessors realised under his stewardship:

• In 1984 CUFSAL was formed to provide a national facility for credit unions
• In 1985 credit unions were the first non-banks to use the banks’ EFTPOS network
• In 1989 Project Renewal was commissioned
• In 1992 Australia-wide AFIC legislation was enacted
• In 1992 CUSCAL and CUFSAL were registered as special service providers
• In 1993 CUSCAL became a principal in the new Australian Payments Clearing Association.

Greg Stevens – A Credit Union Renaissance Man

Ben Woods, Assistant Archivist, Australian Mutuals History

Greg Stevens had a more varied life in credit unions than most people who make a career in the movement. He worked with the Association of NSW Credit Unions, CUFSAL, CUSCAL, Bananacoast Credit Union, FINCOM, Bankstown City Credit Union and Maleny Credit Union.  He told us all about it when we rang him for a chat recently.

Greg grew up on Sydney’s Northern Beaches in a suburb called Killarney Heights. He held an ambition to be an accountant as a youth and indeed went and studied accountancy at TAFE after finishing school. His subsequent education included a number of financial diplomas and eventually a Masters in Finance. His thesis of 1991 titled, “The Australian Credit Union System”, is in our collection and available for researchers to access.

His career in finance began at the Commercial Banking Company (CBC) in Sydney and it was when he was transferred to CBC’s Treasury Department that he got his first exposure to credit unions. One of CBC’s customers was the Association of NSW Credit Unions and Greg’s relationship with the Association deepened when NAB took over CBC and became the long term corporate banker for the credit union movement.

It was during this period when Greg says that he was “headhunted” by Reg Fowler who ran central banking at the Association of NSW Credit Unions and who was a legend of the Australian credit union movement. About the fateful meeting with Reg Fowler, Greg said:

“He invited me out for lunch, I thought it was just a client/customer lunch. But in the end he offered me a job. He told me more and more detail about how the Association operated in their management of credit unions’ liquidity and I became the Investment Manager in early 1983 at the Association and I was I think the first specialist Treasurer hired in any state association for credit unions.

Reg told me that I was also being groomed as part of the National Finance Facility which the Association was leading for national central banking and that subsequently happened in 1986. That was a company called Credit Union Financial Services Australia Ltd (CUFSAL).”

Of his time with the Association Greg said:

“One of my memories working at the Association in Burwood was that while I didn’t have any involvement with credit unions unless they were on the board of the Association, my passion grew after my first State AGM and there was some really strong leaders at certain credit unions and I was inspired by Ken Miller from NSW Teacher’s Credit Union and Bill Howe from Sydney Water Board Credit Union and Helen McIntyre. They were some of the people in my early days that really inspired me and gave me passion in wanting to learn more about credit unions.”

Reg Fowler (left) with Greg Stevens in the late 1980s [from Collection]

 In his time with CUFSAL Greg oversaw developments that still have ramifications for the customer owned banking industry today. While at CUFSAL he oversaw the negotiation of a $100 million credit standby facility with NAB on behalf of Australian credit unions. He also told us that he “designed the company’s first state of the art treasury dealing room”. He went on to say that with CUFSAL “he facilitated a credit and interest rate, assets and liabilities gap policy through Standard & Poor’s – the credit rating agency.  That later went on to getting a credit rating for the credit union movement”.

After achieving all he wanted to with CUFSAL and CUSCAL, Greg left in 1994, for a few months sabbatical only to return to the industry as an Administrator with Bananacoast Credit Union (BCU). He left BCU in 1996 in order to join Bankstown City Credit Union and later became CEO. He said he had an “action packed 5 years” at Bankstown and went on to say:

“I took over from an industry icon Alex Genovese (father of Mark Genovese). It had just had a big renovation. It originated as an industrial credit union which originated from the council. We were under new banking legislation. There was a lot things happening. We were one of the pioneers that took on Fiserv. The new banking system from America. That took a lot of our resources.

But also having a huge building renovation that was looking good. It was time to embark on something big and bold that was more directly involved in the community. So, I took up sponsorships with the Bankstown Bruins and the Bankstown Netball Association to get our name more widely known in the community.

Also we had the Olympic Games on, so we had a lot of excess security in the area. There’s a lot of Lebanese in Bankstown and at the time America and Lebanon hadn’t been getting on and we had the American Administration Team staying in Bankstown during the Olympics. So they were interesting times.”

The final stop on Greg Stevens’ credit union career was his 3 ½ years as CEO of Maleny Credit Union on Queensland’s Sunshine Coast. Greg describes Maleny Credit Union as a “caring and green community credit union”. Greg noted that, “about 60-65% of our loans were for green purposes”. He enjoyed being a part of the local community there and oversaw some positive change.

While he was CEO of Maleny CU, the credit union introduced the Temenos bank-in-a-Box banking system, revamped the HQ building, introduced new staff uniforms and perhaps most significantly, established MCU Financial Services. MCU Financial Services is a finance broker and a wholly owned subsidiary of Maleny Credit Union. Of MCU Financial Services Greg said:

“When you are small you are limited to what you can do, so by setting up a separate company it meant we weren’t competing with ourselves. So if we couldn’t do a loan we referred it to our mortgage broking firm and we could do bigger loans and we could do specialist nonconforming loans where if people couldn’t pay their debts or had bad debt histories we could roll our bad loans into that market and earn commission. Our broker also generated its own loans. But again we kept it in our fold and if the opportunity came we could refinance some of those loans back into our system”.

The above overview is only a brief glimpse of Greg’s fascinating and to borrow his words, “action packed”, credit union career. Hopefully, in time, Australian Mutuals History will be able to sit down with Greg to more fully unpack his career in a formal oral history interview which we will record for use for researchers now and into the future.