Australian churches will be barred from offering 'easy access' bank-style accounts to their parishioners in new restrictions proposed by the national regulator on $1 billion in investments in unregulated Church-run funds, reports The Australian.
The changes come into effect in June. The Australian Prudential Regulation Authority (APRA) initially proposed to end the exemption for religious charitable development funds from the need to be regulated under the Banking Act, but revised this after discussions with Church groups.
A number of the 59 such funds nationwide, which control more than $7bn in assets between them, have recently been aggressively pursuing retail investors, including children and families, offering at-call deposit accounts at shopfront offices in regional towns.
APRA yesterday declined to comment on the policy changes but its most recent published proposals include ending these funds’ ability to offer at-call accounts and BPAY facilities to potential retail customers.
The regulator 'noted' some Church funds were putting compulsory disclosures stating they are not regulated 'in the fine print of documents or in other places where it is questionable that the disclosure is clear'.
Other funds, such as the Catholic Armidale Diocesan Investment Group, do make this disclosure clear, as well as prominently publicising the fact investments held by the fund will be used to finance the work of the Church. The group, which did not return our calls, currently holds over $180 million in deposits from more than 6000 investors, up from less than $5m in such deposits 30 years ago. Across Australia, individuals have invested more than $1.1bn in church development funds.
In a written submission to APRA, the General Secretary of the Australian Catholic Bishops Conference, Fr Brian Lucas, said 'members of the Church who place some of their money with (development funds) have a different expectation to bank customers. They provide money to assist the mission of the Church.'
FULL STORY Watchdog ready to target church investment funds (The Australian)