Revocation of authority to carry on banking business 2021 – Pulse Credit Union Limited

Overview

The Revocation of Authority to Carry on Banking Business 2021, gazetted on 29 November 2021, pertains to the revocation of the section 9 authority of Pulse Credit Union Limited (ABN 35 087 651 670) to conduct banking business in Australia. This revocation follows the credit union's formal written request to the Australian Prudential Regulation Authority (APRA) to cease its banking operations. The revocation was authorised by Therese McCarthy Hockey, an Executive Director of the Banking Division and a delegate of APRA, under subsection 9A(1) of the Banking Act 1959, and was made on the condition that it would not be contrary to the national interest or the interests of the credit union's depositors. The revocation was enacted to address the need for orderly cessation of banking activities by the credit union, ensuring protection for depositors and adherence to national financial interests. The Banking Act 1959, as amended, provides the legislative framework under which APRA can revoke the banking authority of financial institutions. This revocation instrument is a demonstration of APRA's regulatory oversight, ensuring that banking entities comply with legislative requirements and maintain the stability of the financial system. The policy objective of the revocation, as stated in the instrument, is to facilitate the orderly exit of Pulse Credit Union Limited from the banking sector, thereby protecting the interests of depositors and maintaining confidence in the financial system.

Scope and Application

The Revocation of Authority to Carry on Banking Business 2021 applies specifically to Pulse Credit Union Limited, a body corporate with ABN 35 087 651 670, which has requested the revocation of its section 9 authority to carry on banking business in Australia. This revocation is administered by Therese McCarthy Hockey, an Executive Director of the Banking Division and a delegate of the Australian Prudential Regulation Authority (APRA). The instrument is grounded in the Banking Act 1959, and it comes into effect on the date it is made. The authority revocation is conditional upon Therese McCarthy Hockey being satisfied that such revocation would not be contrary to the national interest or the interests of depositors of Pulse Credit Union Limited. The scope of the Act is confined to the specific entity mentioned and does not extend to other entities unless they make a similar request and meet the stipulated conditions. The jurisdictional reach of the Act is national, encompassing all of Australia, as it pertains to the revocation of a banking authority under the Banking Act 1959. The Act does not explicitly state any exclusions, exemptions, or thresholds, and it does not extend its application through subordinate instruments in this particular instance.

Key Provisions

The key provision of the Gazette, C2021G00910, pertains to the revocation of the section 9 authority of Pulse Credit Union Limited under the Banking Act 1959. This authority is what allows the credit union to carry on banking business in Australia. The revocation is effective from the date the Gazette is issued, which is 29 November 2021 (section 1). The revocation is executed by Therese McCarthy Hockey, who is a delegate of the Australian Prudential Regulation Authority (APRA), following a written request by Pulse Credit Union Limited and after satisfying herself that such revocation is not contrary to the national interest or the interests of depositors (section 1). The Act imposes several obligations on Pulse Credit Union Limited. Primarily, the credit union must formally request in writing to APRA the revocation of its section 9 authority. Once APRA receives this request, it must ensure that the revocation would not negatively impact the national interest or depositors before proceeding with the revocation (section 1). Additionally, APRA is required to publish notice of the revocation in the Gazette and may also publish it in other ways (section 3). Failure to comply with the requirements and provisions of the Act may result in various civil and criminal consequences. Although the Gazette does not specify offences or penalties directly, breaches of the Banking Act 1959, which governs the operations of banking entities, could lead to significant penalties. Under the Act, unauthorised banking activities can result in fines and imprisonment. For instance, under section 128 of the Banking Act 1959, a person who contravenes certain provisions can be subject to fines of up to $210,000 for a corporation and imprisonment for up to five years. These penalties underscore the importance of adhering to the regulatory framework set by APRA and the Act. In summary, the Gazette C2021G00910 serves as an official notice of the revocation of Pulse Credit Union Limited's banking authority, effective immediately upon publication. It outlines the necessary steps taken by APRA, including the formal request from the credit union and the assessment of potential impacts on the national interest and depositors. The Act imposes obligations on the credit union to formally request the revocation and on APRA to ensure it aligns with national and depositor interests before proceeding. Non-compliance with the Act could lead to severe civil and criminal penalties, reinforcing the significance of adhering to the legislative framework.