Does anyone have any idea of how much interest a Credit Union or.. any body would need to charge in order to pay its staff a reasonable salary?

Do Banks make most of their money from interest....or fees and charges?

Once we know these basic facts, we can then move to consider a solution and how attractive it might be.

any info is welcome.

Yabby,

Spoken like a true shareholder. Certainly whilst investing in bank shares is a way of accessing bank profits, for whatever reason, it doesn’t work for everybody. Putting that aside, your Japan example is completely misleading.

Whilst your example looks like a low margin solution, there are a myriad of sources for funds and equally, a number of finance products that St George offer. For example, I notice their HIGH INTEREST savings account pays the customer 7% neat, yet their low rate credit card is charged to the customer at 12.99%. Of course other savings accounts are lower and other credit cards are higher, but the 1% markup (around 11% margin) is farcical. Taking the more realistic example I have offered, poor St Georges margin is more like 85.7%!

That also completely discounts revenue and profit from fees. St George has hundreds of them.

Amongst the questions raised here is the one of social responsibility of banks. Unfortunately during the 1980's, the push started to privatise the Commonwealth Bank, which at the time, belonged to the people. On 17th July 1991, CBA ceased to be a statutory body and became a public company. This created an asset that was able to be sold and drove the last nail into the coffin of large scale, socially responsible banking. This made it about profit.

Whilst CBA continue to exert a strong and positive competitive influence in the market, the eternally unanswered question is whether they would have or could have been a more effective social tool if we maintained ownership as a country.

Credit unions can and will never compete with banks whilst the market stands as it is. They simply do not have the scale and this affects them on any number of levels, whether it is infrastructure cost, diversity of services, or the ability to offset risk - and the list goes on. The creation of a mega-credit union may be possible through consolidation, however on the whole, credit unions are a parochial lot and this really challenges the concept. (Although the debate and idea should not be abandoned).

mortgageinsider

mortgageinsider,

Thanks for the link, I suspected as such. Maybe a law that all products must be linked by a fixed amount to the banks standard variable rate would tie the banks hands a bit more?

One more stupid question. Where does the money go in this 3 days to clear a cheque, or electronic transfers that you set up and only appear on the electronic statement about 24 hours later. Are the banks robbing you of interest in the process, and is it the departure or destination bank that gets the free ride? Is the dpearture bank a fraud when it says the money has left your account, or is the destination bank just not showing it? I don't understand this black hole.

MI, I remind you that virtually all working Australians are bank shareholders,
as the share registry of our big banks shows. Nearly all super fund money, on
behalf of workers.

Back in the days when the CBA was Govt owned, the bank spread was around
4%, its declined to around 2.5% through competition. In other words, when
the Govt owned the CBA, the Govt ripped you off.

Anyone can buy and own bank shares. I actually learnt this little lesson from
one of my 17 year old employees. Whilst her friends bought clothes and cds,
she saved her pennies and bought Westpac shares in the early 90s, for around 3$
each. If a 17 year old kid straight from school can do it, anyone can.

Where our banks have a problem is that because of our tax system, Australians
are bad savers. So banks have to borrow about half of what they lend out, from
overseas sources. Their cost of funds is a lot higher then what they pay for
retail deposits. As that cost rises, there is now more competition for retail
deposits. You can easily obtain 8% on your money right now, in a very
competitive market.

Sure banks make extra money on credit cards. But then its mug consumers who
get sucked in by not paying off their credit cards in time. I call it the spending
gene, some just can’t help themselves and do without for a while.

Why should I feel sorry for BD etc, if he has bought a large chunk of land in
suburbia, which he might one day sell to developers, as his land increases
in value by an enormous amount?

Frankly I would rather have healthy Australian banks, then banks on the verge
of going bust, due to lack of profitability. If that was the case, overseas investors
would be charging them 16-17% interest for funds, not 8.5% as now.

Usual Suspect,

It would normally take only one day for a between banks cheque to clear the exchanges. They keep the float. When living in Singapore, I was surprised and a little embarrassed, because a Singaporean cheque in favour of Australian American Express "Charge" Card" paid in Singapore, to our Australia took seven days to clear in Singapore, [In reality, electronically a day, I suspect]and a further three days process to Australia. As a result we missed the due date and needed to explain to Amex in Oz what happened.

[We just arrived bank in Australia they rang both me and my wife for our Amex numbers, same account, but different numbers; they double billed us. When asked what about the interest I was told they don't pay interet for "their" mistakes. I guess I push it legally. The points being double billing and not correcting it must be bordering on fraud. If they do this 100,000 times those penny mistakes add-up to a large sum.]

The Exchanges issue has been around for decades. At Westpac other banks' cheques went into what is called "bin eight". Bin Eight cheques were exchanged that night, after business ours. The next business day, the payees' banks have the cheque in possession. It could be posted that day unless banks' still use mechanical readers and there is damage to the MICR line.

O

Arjay and friends,

The polies will just shelf the petition with all the others. It would be better to receive a ruling on the legality of your proposal from the Attorney-General for adjudication. Write in a cooly worded style, one or two pages at the most and request a reply.

If the legals are okay, write to the to the Treasurer attracting the A-G's response, while emailing all members of parliament.

I've looked though my old textbooks from Institute of Bankers exams, but that was in the early eighties and the info. could be too old.

One would need an organisation and several person-weeks to organise a major rally or a "Bash the Banks Day". Say having 100,000 people cancelling their periodal debts and paying their instalments on a toilet roll core drawn on a deposit account: It is valid provided the conditions for drawing a Bill of Exchange are met. It might require a duty stamp, is applicable in your state.

Small numbers, the Banks would try to retort to the parties behaviour with anti-vexatious behaviour actions. It would require large numbers and media to ensure the public and courts would see it as a full-on Public Protest.