Bendigo and Adelaide Bank has teamed up with an alliance of Australian credit unions to come up with a new banking model that secures independence and identities of the participating credit unions.

The new Alliance model has been developed by Bendigo and four credit unions which include AWA, BDCU, Circle and Service One.

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Under the proposal, loans and deposits of the participating credit unions will be transferred to Bendigo Bank, with reserves remaining 100% member-owned.

At the same time, Bendigo will become the credit unions’ approved deposit-taking institution, as well as will assume responsibility for compliance, systems and balance sheet information.

The credit unions would have access to new products and technology from Bendigo eventually, and would retain pricing and loan approval powers, and continue servicing customers via their existing branches.

The four credit unions have 39,000 members in total and are projected to transfer approximately $550m in loans and about $620m in deposits.

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The proposal is subject to approval from 75% of credit union members voting at the respective credit union annual general meetings on 10 December this year, and final approvals from Australian Prudential Regulation Authority and the Federal Treasurer.

Commenting on the new model, Mike Hirst, managing director of Bendigo, and Peter Carlin, Service One CEO and Alliance spokesman, said, "We keep our independence, remain 100 per cent member-owned and continue to provide a very caring, personal service. At the same time the agreement with Bendigo opens up greater capacity to meet our members’ needs, offer greater competitive choice and provide access to a wider range of services and modern service technologies."